ADVANTUS SPECTRUM FUND INC
485BPOS, 1997-01-29
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<PAGE>
                                               File Numbers 2-94175 and 811-4143

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form N-1A
          REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933  X  
                                                                  ---
                       Pre-Effective Amendment Number ___

   
                       Post-Effective Amendment Number 17
                                     and/or
    

      REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940  X  
                                                                      ---
   
                               Amendment Number 17
    

                          ADVANTUS SPECTRUM FUND, INC.
               (Exact Name of Registrant as Specified in Charter)

               400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA  55101
                    (Address of Principal Executive Offices)
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 228-4833

       ERIC J. BENTLEY, 400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101
                    (Name and Address of Agent for Service)  

   
                                    Copy to:
                           Michael J. Radmer, Esquire
                              Dorsey & Whitney LLP
                             220 South Sixth Street
                       Minneapolis, Minnesota  55402-1498
    

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (check appropriate box)
               immediately upon filing pursuant to paragraph (b)
          ---
           X   On January 31, 1997 pursuant to paragraph (b)
          ---
               60 days after filing pursuant to paragraph (a)(1)
          ---
               on (date) pursuant to paragraph (a)(1)
          ---
               75 days after filing pursuant to paragraph (a)(2)
          ---
               on (date) pursuant to paragraph (a)(2) of Rule 485.
          ---
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
              this post-effective amendment designates a new effective date for
          ---
               a previously filed post-effective amendment.

   
Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940, 
Registrant has previously elected to register an indefinite number of its common
shares under the Securities Act of 1933.  The Rule 24f-2 Notice for Registrant's
most recent fiscal year was filed November 18, 1996.
    

<PAGE>

                          ADVANTUS SPECTRUM FUND, INC.
                       Registration Statement on Form N-1A

                        ---------------------------------

                              CROSS REFERENCE SHEET
                             Pursuant to Rule 481(a)

                        ---------------------------------

ITEM NO.                                             PROSPECTUS HEADING
- --------                                             ------------------
     1.  Cover Page . . . . . . . . . . . . . . . .  Cover Page 
     
     2.  Synopsis . . . . . . . . . . . . . . . . .  Prospectus Summary; Fees 
                                                     and Expenses

     3.  Financial Highlights . . . . . . . . . . .  Financial 
                                                     Highlights; Investment 
                                                     Performance

     4.  General Description of Registrant  . . . .  Investment 
                                                     Objectives, Policies and 
                                                     Risks; Portfolio Turnover;
                                                     Management of the Fund;
                                                     General Information

   
     5.  Management of the Fund . . . . . . . . . .  Management of the 
                                                     Fund; General
                                                     Information
    

     6.  Capital Stock and Other Securities . . . .  Dividends and 
                                                     Capital Gains
                                                     Distributions; Taxes;
                                                     General Information

     7.  Purchase of Securities Being Offered . . .  Purchase of Fund 
                                                     Shares; Sales Charges;
                                                     Special Purchase Plans

     8.  Redemption or Repurchase . . . . . . . . .  Redemption of Fund 
                                                     Shares; Reinstatement
                                                     Privilege

     9.  Pending Legal Proceedings  . . . . . . . .  Not Applicable

                                                     STATEMENT OF ADDITIONAL
                                                     -----------------------
ITEM NO.                                             INFORMATION HEADING
- --------                                             -------------------
     
     10. Cover Page . . . . . . . . . . . . . . . .  Cover Page
     
     11. Table of Contents  . . . . . . . . . . . .  Table of Contents
     
     12. General Information and History  . . . . .  General Information and 
                                                     History
     
     13. Investment Objectives and Policies . . . .  Investment Objectives and 
                                                     Policies; Investment 
                                                     Restrictions; Portfolio 
                                                     Turnover
     
     14. Management of the Fund . . . . . . . . . .  Directors and Executive 

<PAGE>

                                                     Officers; Director
                                                     Liability

     15. Control Persons and Principal Holders
         of Securities . . . . . . . . . . . . . .   Capital Stock and Ownership
                                                     of Shares
     
     16. Investment Advisory and Other Services . .  Investment Advisory and 
                                                     Other Services
     
     17.  Brokerage Allocation . . . . . . . . . . . Portfolio Transactions and 
                                                     Allocation of Brokerage
     
     18. Capital Stock and Other Securities . . . .  Capital Stock and Ownership
                                                     of Shares
     
     19. Purchase, Redemption and Pricing
         of Securities Being Offered . . . . . . .   How to Buy Shares; Net 
                                                     Asset Value and Public
                                                     Offering Price; Reduced
                                                     Sales Charges; Shareholder
                                                     Services; Redemptions
     
     20. Tax Status . . . . . . . . . . . . . . . .  Distributions and Tax
                                                     Status
     
     21. Underwriters . . . . . . . . . . . . . . .  Investment Advisory and 
                                                     Other Services
     
     22. Calculation of Performance Data  . . . . .  Calculation of Performance
                                                     Data

     23. Financial Statements . . . . . . . . . . .  Financial Statements
<PAGE>
   
                        [ADVANTUS -TM- FAMILY OF FUNDS]
   PROSPECTUS DATED JANUARY 31, 1997
    
 
  ADVANTUS SPECTRUM FUND, INC.
 
- ----------------------------------------------------------------------
      400 Robert Street North - St. Paul, Minnesota 55101 - 1-800-443-3677
- --------------------------------------------------------------------------------
 
    Advantus  Spectrum Fund, Inc. ("Spectrum Fund" or the "Fund") is an open-end
diversified management investment  company, commonly called  a mutual fund.  The
Fund currently offers its shares in three classes: Class A, Class B and Class C.
Each  class is sold pursuant to different sales arrangements and bears different
expenses.
    The Fund's investment objective is to  seek the most favorable total  return
(including  interest, dividends  and capital  appreciation) consistent  with the
preservation of capital. To achieve this objective, the composition of  Spectrum
Fund's  portfolio will  vary with  prevailing economic  conditions. Accordingly,
Spectrum Fund's portfolio at any given time may be primarily composed of  equity
securities,   including   securities   convertible   into   equity   securities,
mortgage-related securities,  debt securities,  money market  securities or  any
combination thereof.
    There  is risk in all  investments. There can be  no assurance that the Fund
will achieve its objective.
    SHARES  OF  THE  FUND  MAY  BE   SOLD  THROUGH  BANKS  OR  OTHER   FINANCIAL
INSTITUTIONS.  THE  FUND'S  SHARES  ARE  NOT  DEPOSITS  OR  OBLIGATIONS  OF,  OR
GUARANTEED OR ENDORSED BY, ANY BANK,  AND SUCH SHARES ARE NOT FEDERALLY  INSURED
BY  THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY.  AN INVESTMENT  IN THE  FUND INVOLVES  INVESTMENT RISK,  INCLUDING
POSSIBLE LOSS OF PRINCIPAL, DUE TO FLUCTUATIONS IN THE FUND'S NET ASSET VALUE.
   
    This  Prospectus sets  forth concisely  the information  which a prospective
investor should know about the Fund  before investing and it should be  retained
for  future reference. A "Statement of Additional Information" dated January 31,
1997, which provides a  further discussion of certain  areas in this  Prospectus
and  other matters which  may be of  interest to some  investors, has been filed
with the  Securities  and Exchange  Commission  and is  incorporated  herein  by
reference.  For a free copy, write or call  the Fund at the address or telephone
number shown above.
    
 
- --------------------------------------------------------------------------------
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
- --------------------------------------------------------------------------------
 
TABLE OF
CONTENTS
- ---------
 
   
<TABLE>
<S>                                            <C>
PROSPECTUS SUMMARY...........................          3
 
FEES AND EXPENSES............................          6
 
FINANCIAL HIGHLIGHTS.........................          8
 
INVESTMENT OBJECTIVES, POLICIES AND RISKS....         10
 
PORTFOLIO TURNOVER...........................         14
 
MANAGEMENT OF THE FUND.......................         14
 
PURCHASE OF FUND SHARES......................         16
 
SALES CHARGES................................         17
 
SPECIAL PURCHASE PLANS.......................         21
 
EXCHANGE AND TELEPHONE TRANSFER OF FUND
SHARES.......................................         21
 
REDEMPTION OF FUND SHARES....................         22
 
TELEPHONE TRANSACTIONS.......................         23
 
REINSTATEMENT PRIVILEGE......................         24
 
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS ...         24
 
TAXES........................................         24
 
INVESTMENT PERFORMANCE.......................         25
 
GENERAL INFORMATION..........................         27
 
COUNSEL AND INDEPENDENT AUDITORS.............         28
 
CUSTODIAN....................................         28
</TABLE>
    
 
  No  dealer, sales representative  or other person has  been authorized to give
any information or  to make any  representations other than  those contained  in
this  Prospectus (and/or in the Statement  of Additional Information referred to
on the cover page of this Prospectus), and if given or made, such information or
representations must not be relied upon as having been authorized by the Fund or
MIMLIC Sales. This Prospectus  does not constitute an  offer or solicitation  by
anyone in any state in which such offer or solicitation is not authorized, or in
which the person making such offer or solicitation is not qualified to do so, or
to any person to whom it is unlawful to make such offer or solicitation.
 
                                       2
<PAGE>
- --------------------------------------------
PROSPECTUS
SUMMARY
 
   
                  Advantus  Spectrum Fund, Inc. ("Spectrum  Fund" or the "Fund")
is an open-end diversified  investment company, commonly  called a mutual  fund.
The  Fundoffers investors the choice between three classes of shares which offer
different sales charges and bear  different expenses. These alternatives  permit
an investor to choose the method of purchasing shares that the investor believes
is  most beneficial  given the amount  of the  purchase, the length  of time the
investor expects  to hold  the shares  and other  circumstances. The  Fund is  a
member  of a family of mutual funds  known as the "Advantus Funds." The Advantus
Funds consist of the Fund  and nine other mutual funds,  all of which share  the
same investment adviser. Except for Advantus Money Market Fund, Inc., all of the
Advantus Funds offer more than one class of shares (the "Advantus Load Funds").
    
 
- --------------------------------------------
INVESTMENT
OBJECTIVE   A summary of  the investment objective of  the Fund, together with a
brief description of the types  of securities in which  the Fund will invest  in
pursuit  of its  investment objective, can  be found  on the cover  page of this
Prospectus. See also "Investment Objectives, Policies and Risks."
 
- --------------------------------------------
INVESTMENT
ADVISER    Advantus  Capital  Management,  Inc.  ("Advantus  Capital")  acts  as
investment  adviser to  the Fund and  receives an  annual fee equal  to a stated
percentage of  average daily  net assets  of  the Fund.  Advantus Capital  is  a
wholly-owned   subsidiary   of   MIMLIC   Asset   Management   Company  ("MIMLIC
Management"). MIMLIC Management  is a  subsidiary of The  Minnesota Mutual  Life
Insurance Company ("Minnesota Mutual"). See "Management of the Fund."
 
- --------------------------------------------
HOW TO PURCHASE
FUND  SHARES  MIMLIC Sales Corporation  ("MIMLIC Sales"), a subsidiary of MIMLIC
Management, acts as the principal underwriter (distributor) of the shares of the
Fund. Shares of the Fund  may be purchased from  MIMLIC Sales, and from  certain
other  broker-dealers, at the price per share next determined after receipt of a
purchase order in proper form. The minimum initial purchase is $250.  Additional
investments can be made at any time for $25 or more. Shares of the Fund are sold
in  three classes which  are subject to  different sales charges. Broker-dealers
and sales personnel of MIMLIC Sales may receive different compensation depending
on which class of shares they sell.
  CLASS A SHARES.  An investor who purchases Class A shares pays a sales  charge
at  the  time of  purchase.  (Purchase orders  for  $1,000,000 or  more  will be
accepted for Class A shares  only and are not subject  to a sales charge at  the
time  of purchase.) Class A shares are not  subject to any charges when they are
redeemed. The  initial  sales  charge  may be  reduced  or  waived  for  certain
purchases.  Class A shares are subject to a  Rule 12b-1 fee payable at an annual
rate of .35%  of the Fund's  average daily  net assets attributable  to Class  A
shares.  Class A shares of Spectrum Fund are subject to a Rule 12b-1 fee payable
at an annual  rate of  .35% of  average daily  net assets  attributable to  such
shares. See "Sales Charges--Class A Shares."
  CLASS  B SHARES.  Class B shares are sold without an initial sales charge, but
are subject to a contingent deferred sales charge of up to 5% if redeemed within
six years of purchase. Class  B shares are also subject  to a higher Rule  12b-1
fee  than Class A shares. The Rule 12b-1 fee  for Class B shares will be paid at
an annual rate of 1.00% of the  Fund's average daily net assets attributable  to
Class  B shares. Class B shares will  automatically convert to Class A shares at
net asset value approximately twenty-eight to eighty-four months after purchase,
depending on  the amount  purchased.  Class B  shares  provide an  investor  the
benefit  of putting  all of  the investor's  dollars to  work from  the time the
investment is made, but  until conversion will have  a higher expense ratio  and
pay  lower dividends than Class  A shares due to the  higher Rule 12b-1 fee. See
"Sales Charges--Class B Shares."
  CLASS C SHARES.   Class  C shares  are sold  without either  an initial  sales
charge or a contingent deferred sales charge. Class C shares are also subject to
a  higher Rule 12b-1 fee, paid at an  annual rate of 1.00% of the Fund's average
daily  net  assets  attributable  to  Class  C  shares.  Class  C  shares   will
automatically  convert to Class A shares  at net asset value approximately forty
to ninety-six months after purchase, depending on the amount purchased. Class  C
shares  also provide an  investor the benefit  of putting all  of the investor's
dollars to work from the time the investment is made. Although not subject to  a
contingent  deferred sales charge, Class C shares must be held longer than Class
B shares before they convert automatically to Class A shares, and are subject to
the higher Rule 12b-1  fee during the longer  holding period. In addition,  like
Class B
 
                                       3
<PAGE>
shares,  Class C shares will have a higher expense ratio and pay lower dividends
than Class A shares, due to the higher Rule 12b-1 fee, prior to conversion.  See
"Sales Charges--Class C Shares."
  CHOOSING  A CLASS.  The  decision as to which class  of shares provides a more
suitable investment for an investor may depend on a number of factors, including
the amount and intended length  of the investment. Investors making  investments
that  qualify for  a waiver  of initial  sales charges  should purchase  Class A
shares. Other investors might consider Class B or Class C shares because all  of
the  purchase price is invested immediately. Investors who expect to hold shares
for relatively shorter periods  of time may prefer  Class C shares because  such
shares  may be  redeemed at  any time without  payment of  a contingent deferred
sales charge. Investors who  expect to hold shares  longer, however, may  choose
Class  B shares  because such shares  convert to  Class A shares  sooner than do
Class C shares  and thus pay  the higher Rule  12b-1 fee for  a shorter  period.
Orders  for Class B or Class C shares  for $1,000,000 or more will be treated as
orders for Class A shares or declined.
 
- --------------------------------------------
HOW TO REDEEM
FUND SHARES  Shareholders may redeem (sell) shares of the Fund at the per  share
net  asset value next determined  following receipt by the  Fund (at the mailing
address listed on the cover page) of  a written redemption request. Class A  and
Class  C shares of  the Fund are  redeemable at net  asset value without charge.
Class B  shares of  the Fund  are also  redeemable at  net asset  value but  are
subject to a contingent deferred sales charge of up to 5% if redeemed within six
years  of purchase. The amount of the  contingent deferred sales charge, as well
as the period during which it applies, varies with the amount purchased.  Shares
of the Fund may also be redeemed by telephone, if this option has been selected.
See "Redemption of Fund Shares."
 
- --------------------------------------------
INCOME AND
TAXES   Net investment income is the  amount of dividends and interest earned on
the Fund's securities less operating expenses. It is distributed to shareholders
quarterly. Capital gains may be realized  on the sale of the Fund's  securities.
Capital  gains, when  available, are  generally distributed  once a  year during
December. See "Dividends and Capital Gains Distributions."
  As a regulated investment company, the Fund is not taxed on the net investment
income and capital  gains it  distributes to  its shareholders.  For income  tax
purposes,  shareholders must report any net  investment income and capital gains
distribution reported to  them as income.  Shareholders of the  Fund receive  an
annual statement detailing federal tax information. See "Taxes."
 
- --------------------------------------------
RISK
FACTORS   In  addition to  the other information  set forth  in this Prospectus,
prospective investors in the Fund should consider the following factors:
- - The   Fund    may   invest    up   to    10%   of    its   net    assets    in
  securities which are restricted as to disposition or otherwise illiquid.
- - The Fund may, with respect to 25% of its total
  assets,  invest in excess of 5% of its  total assets in securities of a single
  issuer.
- - The value of fixed income securities, such as those
  purchased by the Fund,  may be expected  to vary inversely  to changes in  the
  prevailing  market  interest  rates.  In  addition,  in  periods  of declining
  interest   rates,   the   rate   of   prepayment   of   mortgages   underlying
  mortgage-related  securities  tends to  increase,  with the  result  that such
  prepayments must be reinvested at lower rates.
- - Equity securities, such as those purchased by the
  Fund, are more  volatile and  present greater risk  than some  other forms  of
  investment.
- - The Fund has the right to purchase securities in
  foreign  countries. Investors should consider  carefully the substantial risks
  involved in investing in  securities issued by  companies of foreign  nations,
  which are in addition to the usual risks inherent in domestic investments. The
  Fund  may also be affected either  unfavorably or favorably by fluctuations in
  the relative rates of exchange between the currencies of different nations, by
  exchange  control  regulations  and  by  indigenous  economic  and   political
  developments.
- - The Fund may purchase and sell certain types of
  options  contracts. The use of options contracts involves additional potential
  risks, in addition to the risks  associated with the underlying securities  on
  which  such options are  written, including the  risk that the  prices of such
  underlying securities will not move as anticipated.
  For discussions  of  risks  associated with  specific  investments  and  risks
associated  with investing in the Fund  see "Investment Objectives, Policies and
Risks."
 
                                       4
<PAGE>
 
<TABLE>
<S>           <C>
- -------------------------------------------------------------------------------------------
              The purpose of  this table  is to assist  the investor  in understanding  the
FEES AND      various  costs and expenses that an investor  in the Funds will bear directly
EXPENSES      or indirectly.
- ---------
</TABLE>
 
   
<TABLE>
<CAPTION>
                                                                                  CLASS A         CLASS B         CLASS C
<S>                                                                               <C>             <C>             <C>
- -------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
 
MAXIMUM SALES LOAD IMPOSED ON PURCHASES
(AS A PERCENTAGE OF OFFER PRICE)                                                   5.00%           0.00%            0.00%
- -------------------------------------------------------------------------------------------------------------------------
MAXIMUM DEFERRED SALES LOAD
(AS A PERCENTAGE OF REDEMPTION PROCEEDS)                                           0.00%           5.00%            0.00%
- -------------------------------------------------------------------------------------------------------------------------
SALES LOAD IMPOSED ON REINVESTED DIVIDENDS                                            0               0                0
- -------------------------------------------------------------------------------------------------------------------------
REDEMPTION FEES+                                                                      0               0                0
- -------------------------------------------------------------------------------------------------------------------------
EXCHANGE FEES
  - ON FIRST FOUR EXCHANGES EACH YEAR                                                 0               0                0
  - ON EACH ADDITIONAL EXCHANGE                                                   $7.50           $7.50            $7.50
  +REDEMPTION PROCEEDS SENT BY WIRE ARE SUBJECT TO A WIRE CHARGE OF
   $5.00, WHICH WILL BE ADDED TO THE AMOUNT REDEEMED.
ANNUAL FUND OPERATING EXPENSES
 (AS A PERCENTAGE OF AVERAGE NET ASSETS)
INVESTMENT ADVISORY FEES                                                           0.60%           0.60%            0.60%
- -------------------------------------------------------------------------------------------------------------------------
RULE 12b-1 FEES*                                                                   0.35%           1.00%            1.00%
- -------------------------------------------------------------------------------------------------------------------------
OTHER EXPENSES                                                                     0.31%           0.30%            0.30%
                                                                                  -------         -------         -------
TOTAL FUND OPERATING EXPENSES                                                      1.26%           1.90%            1.90%
                                                                                  -------         -------         -------
</TABLE>
    
 
   
   *A LONG-TERM SHAREHOLDER MAY PAY  DISTRIBUTION FEES, WHICH ARE CONSIDERED  TO
BE  ASSET-BASED  SALES  CHARGES, WHICH  EXCEED  THE ECONOMIC  EQUIVALENT  OF THE
MAXIMUM SALES  CHARGE  PERMITTED  BY  THE  NATIONAL  ASSOCIATION  OF  SECURITIES
DEALERS, INC.
    
 
                                       5
<PAGE>
- ---------------------------------------------------------------
SHAREHOLDER EXPENSE
EXAMPLE   An investor  would pay the  following expenses on  a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of each time period.
 
   
<TABLE>
<CAPTION>
YEAR REDEEMED           CLASS A          CLASS B          CLASS C
<S>                     <C>              <C>              <C>
- -----------------------------------------------------------------
 
       1                 $ 62             $ 69             $ 19
 
       3                   88               95               60
 
       5                  116              118              103
 
      10                  195              198*             206**
</TABLE>
    
 
   AN INVESTOR WOULD PAY THE FOLLOWING EXPENSES ON THE SAME INVESTMENT IN  CLASS
B SHARES, ASSUMING NO REDEMPTION:
 
   
<TABLE>
<CAPTION>
YEAR REDEEMED           CLASS B
<S>                     <C>
- -------------------------------
 
       1                 $ 19
 
       3                   60
 
       5                  103
 
      10                  198*
</TABLE>
    
 
   *REFLECTS  CONVERSION OF CLASS  B SHARES TO  CLASS A SHARES  (WHICH PAY LOWER
ONGOING EXPENSES) APPROXIMATELY SEVEN YEARS AFTER PURCHASE.
 
   **REFLECTS CONVERSION OF CLASS  C SHARES TO CLASS  A SHARES (WHICH PAY  LOWER
ONGOING EXPENSES) APPROXIMATELY EIGHT YEARS AFTER PURCHASE.
 
  THE  EXAMPLES CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A REPRESENTATION
OF PAST OR FUTURE EXPENSES.  ACTUAL EXPENSES MAY BE  GREATER OR LESS THAN  THOSE
SHOWN.
 
                                       6
<PAGE>
 
   
<TABLE>
<S>              <C>
- ----------------------------------------------------------------------------------------------------------------------------
FINANCIAL        The  following financial  highlights table  shows certain  per share  data and  selected important financial
HIGHLIGHTS       information for evaluating the Fund's results. This information  has been audited by KPMG Peat Marwick  LLP,
- -----------      independent  auditors, and should be read in conjunction  with the audited financial statements contained in
                 the Fund's Annual Report to Shareholders.
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                                     CLASS A
                       ----------------------------------------------------------------------------------------------------
                                                 PERIOD FROM                                                    PERIOD FROM
                                                 NOVEMBER 1,                                                     NOVEMBER
                              YEAR ENDED           1993 TO                                                          16,
                            SEPTEMBER 30,         SEPTEMBER                YEAR ENDED OCTOBER 31,               1987(A) TO
                       ------------------------      30,       -----------------------------------------------  OCTOBER 31,
                          1996        1995(H)      1994(G)       1993      1992      1991      1990     1989       1988
<S>                    <C>          <C>          <C>           <C>       <C>       <C>       <C>       <C>      <C>
- ---------------------- -----------  -----------  ------------  --------  --------  --------  --------  -------  -----------
NET ASSET VALUE,
 BEGINNING OF PERIOD    $14.79       $13.28       $13.92         $13.63    $13.05    $10.87    $11.84   $10.66   $10.26
                       -----------  -----------  ------------  --------  --------  --------  --------  -------
INCOME FROM INVESTMENT
 OPERATIONS:
NET INVESTMENT INCOME      .34          .45          .28            .29       .38       .48       .55      .59      .48
NET GAINS OR LOSSES ON
 SECURITIES (BOTH
  REALIZED AND
  UNREALIZED)             1.59         1.88         (.55)           .86      1.01      2.28      (.59)    1.15      .60
                       -----------  -----------  ------------  --------  --------  --------  --------  -------
TOTAL FROM INVESTMENT
 OPERATIONS               1.93         2.33         (.27)          1.15      1.39      2.76      (.04)    1.74     1.08
                       -----------  -----------  ------------  --------  --------  --------  --------  -------
LESS DISTRIBUTIONS:
DIVIDENDS FROM NET
 INVESTMENT INCOME        (.34)        (.44)        (.28)          (.31)     (.38)     (.51)     (.62)    (.50)    (.68)
DISTRIBUTIONS FROM
 CAPITAL GAINS            (.85)        (.38)        (.09)          (.55)     (.43)     (.07)     (.31)    (.06)      --
                       -----------  -----------  ------------  --------  --------  --------  --------  -------
TOTAL DISTRIBUTIONS      (1.19)        (.82)        (.37)          (.86)     (.81)     (.58)     (.93)    (.56)    (.68)
                       -----------  -----------  ------------  --------  --------  --------  --------  -------
NET ASSET VALUE, END
 OF PERIOD              $15.53       $14.79       $13.28         $13.92    $13.63    $13.05    $10.87   $11.84   $10.66
                       -----------  -----------  ------------  --------  --------  --------  --------  -------  -----------
TOTAL RETURN (b)          13.7%        18.4%        (1.9)%(c)       8.7%     11.1%     26.0%      (.5)%    16.8%    10.6%(d)
- ---------------------- -----------  -----------  ------------  --------  --------  --------  --------  -------  -----------
NET ASSETS, END OF
 PERIOD (IN THOUSANDS) $54,848      $55,624      $55,286        $57,048   $38,417   $18,588   $10,008   $8,427   $6,478
- ---------------------- -----------  -----------  ------------  --------  --------  --------  --------  -------  -----------
RATIO OF EXPENSES TO
 AVERAGE DAILY NET
 ASSETS (e)               1.26%        1.33%        1.27%(f)       1.22%     1.35%     1.35%     1.35%    1.33%    1.09%(f)
- ---------------------- -----------  -----------  ------------  --------  --------  --------  --------  -------  -----------
RATIO OF NET
 INVESTMENT INCOME TO
 AVERAGE
  DAILY NET ASSETS (e)    2.28%        3.22%        2.24%(f)       2.16%     3.02%     4.07%     4.98%    5.36%    5.06%(f)
- ---------------------- -----------  -----------  ------------  --------  --------  --------  --------  -------  -----------
PORTFOLIO TURNOVER
 RATE (EXCLUDING
 SHORT-
  TERM SECURITIES)       140.5%       125.5%       124.5%          92.1%    123.3%     56.2%     65.8%   111.3%   150.6%
AVERAGE COMMISSION
 RATE ON COMMON STOCK
 TRANSACTIONS(i)       $ .0641          N/A          N/A            N/A       N/A       N/A       N/A      N/A      N/A
</TABLE>
    
 
   
<TABLE>
<S>                                                              <C>
   (A) THE FUND WAS INCORPORATED OCTOBER 22, 1984.  HOWEVER,     AVERAGE  DAILY  NET  ASSETS WOULD  HAVE  BEEN  1.40%, 1.50%,
THE  FUND'S  CLASS  A  SHARES  DID  NOT  BECOME  EFFECTIVELY     1.50%,  1.72% AND 2.18%, RESPECTIVELY,  AND THE RATIO OF NET
REGISTERED UNDER THE SECURITIES  ACT OF 1933 UNTIL  NOVEMBER     INVESTMENT  INCOME TO  AVERAGE DAILY  NET ASSETS  WOULD HAVE
16, 1987.  FINANCIAL HIGHLIGHTS  ARE NOT  PRESENTED FOR  THE     BEEN  2.97%,  3.92%, 4.83%,  4.97% AND  3.97%, RESPECTIVELY.
PERIODS PRIOR TO  NOVEMBER 16,  1987 AS THE  FUND'S CLASS  A     (F) ADJUSTED TO AN ANNUAL BASIS.
SHARES  WERE NOT OFFERED FOR SALE TO THE PUBLIC DURING THESE     (G) DURING 1994, THE FUND  CHANGED ITS FISCAL YEAR END  FROM
PERIODS.                                                         OCTOBER 31 TO SEPTEMBER 30.
   (B) TOTAL RETURN FIGURES ARE BASED ON A SHARE OUTSTANDING     (H)  EFFECTIVE MARCH  1, 1995, THE  FUND ENTERED  INTO A NEW
THROUGHOUT  THE   PERIOD   AND   ASSUMES   REINVESTMENT   OF     INVESTMENT   ADVISORY   AGREEMENT   WITH   ADVANTUS  CAPITAL
DISTRIBUTIONS AT NET  ASSET VALUE. TOTAL  RETURN FIGURES  DO     MANAGEMENT,  INC. PRIOR  TO MARCH 1,  1995, THE  FUND HAD AN
NOT  REFLECT  THE   IMPACT  OF   FRONT-END  SALES   CHARGES.     INVESTMENT  ADVISORY AGREEMENT WITH  MIMLIC ASSET MANAGEMENT
   (C)  TOTAL  RETURN  IS  PRESENTED  FOR  THE  PERIOD  FROM     COMPANY.
NOVEMBER 1, 1993 TO SEPTEMBER 30, 1994.                          (I)  BEGINNING  IN  FISCAL  1996, THE  FUND  IS  REQUIRED TO
   (D)  TOTAL  RETURN  IS  PRESENTED  FOR  THE  PERIOD  FROM     DISCLOSE  AN AVERAGE BROKERAGE COMMISSION  RATE. THE RATE IS
NOVEMBER 16, 1987,  COMMENCEMENT OF  OPERATIONS, TO  OCTOBER     CALCULATED  BY DIVIDING THE TOTAL BROKERAGE COMMISSIONS PAID
31, 1988.                                                        ON APPLICABLE PURCHASES AND SALES  OF COMMON STOCKS FOR  THE
   (E)  THE  FUND'S  ADVISER  VOLUNTARILY  ABSORBED $13,585,     PERIOD BY THE TOTAL NUMBER  OF RELATED SHARES PURCHASED  AND
$19,759,  $13,903, $28,759  AND $52,401 IN  EXPENSES FOR THE     SOLD.
YEARS ENDED OCTOBER 31,  1992, 1991, 1990  AND 1989 AND  THE
PERIOD  ENDED OCTOBER  31, 1988,  RESPECTIVELY, FOR  CLASS A
SHARES. IF  CLASS  A  SHARES  HAD  BEEN  CHARGED  FOR  THESE
EXPENSES, THE RATIO OF EXPENSES TO
</TABLE>
    
 
                                       7
<PAGE>
 
   
<TABLE>
<S>                    <C>
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL              The  following  financial highlights  table shows  certain per  share data  and selected  important financial
HIGHLIGHTS             information for evaluating the Fund's  results. This information has been  audited by KPMG Peat Marwick  LLP,
- -----------            independent  auditors, and should be  read in conjunction with the  audited financial statements contained in
                       the Fund's Annual Report to Shareholders.
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                           CLASS B                              CLASS C
                                         -------------------------------------------  ----------------------------
                                                                        PERIOD FROM                   PERIOD FROM
                                                  YEAR ENDED             AUGUST 19                     MARCH 1,
                                                SEPTEMBER 30,           1994(A) TO     YEAR ENDED     1995(A) TO
                                         ----------------------------  SEPTEMBER 30   SEPTEMBER 30,  SEPTEMBER 30,
                                             1996          1995(H)         1994           1996           1995
<S>                                      <C>            <C>            <C>            <C>            <C>
- ----------------------------------------    ------         ------         ------         ------         ------
NET ASSET VALUE, BEGINNING OF PERIOD        $14.74         $13.27         $13.36         $14.74         $13.36
                                            ------         ------         ------         ------         ------
INCOME FROM INVESTMENT OPERATIONS:
NEW INVESTMENT INCOME                          .27            .39            .03            .28            .24
NET GAINS OR LOSSES ON SECURITIES (BOTH
 REALIZED AND UNREALIZED)                     1.56           1.84           (.03)          1.52           1.43
                                            ------         ------         ------         ------         ------
TOTAL FROM INVESTMENT OPERATIONS              1.83           2.23             --           1.80           1.67
                                            ------         ------         ------         ------         ------
LESS DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT INCOME          (.25)          (.38)          (.09)          (.26)          (.29)
DISTRIBUTIONS FROM CAPITAL GAINS              (.85)          (.38)            --           (.85)            --
                                            ------         ------         ------         ------         ------
TOTAL DISTRIBUTIONS                          (1.10)          (.76)          (.09)         (1.11)          (.29)
                                            ------         ------         ------         ------         ------
NET ASSET VALUE, END OF PERIOD              $15.47         $14.74         $13.27         $15.43         $14.74
                                            ------         ------         ------         ------         ------
TOTAL RETURN (b)                              13.1%          17.6%          (.04)%(c)      12.9%          12.6%(e)
- ----------------------------------------    ------         ------         ------         ------         ------
NET ASSETS, END OF PERIOD (IN THOUSANDS)    $7,860         $3,131         $  140         $1,351         $  199
- ----------------------------------------    ------         ------         ------         ------         ------
RATIO OF EXPENSES TO AVERAGE DAILY NET
 ASSETS                                       1.90%          1.99%           .23%(d)       1.90%          2.00%(f)
- ----------------------------------------    ------         ------         ------         ------         ------
RATIO OF NET INVESTMENT INCOME TO
 AVERAGE DAILY NET ASSETS                     1.67%          2.30%           .37%(d)       1.73%          2.17%(f)
- ----------------------------------------    ------         ------         ------         ------         ------
PORTFOLIO TURNOVER RATE (EXCLUDING
 SHORT-TERM SECURITIES)                      140.5%         125.5%         124.5%         140.5%         125.5%
AVERAGE COMMISSION RATE ON COMMON STOCK
 TRANSACTIONS(g)                            $.0641            N/A            N/A         $.0641            N/A
</TABLE>
    
 
   
<TABLE>
<S>                                                              <C>
   (A) COMMENCEMENT OF OPERATIONS.                               (F) ADJUSTED TO AN ANNUAL BASIS.
   (B) TOTAL RETURN FIGURES ARE BASED ON A SHARE OUTSTANDING     (G) BEGINNING  IN  FISCAL  1996, THE  FUND  IS  REQUIRED  TO
THROUGHOUT   THE   PERIOD   AND   ASSUMES   REINVESTMENT  OF     DISCLOSE AN AVERAGE BROKERAGE  COMMISSION RATE. THE RATE  IS
DISTRIBUTIONS  AT NET  ASSET VALUE. TOTAL  RETURN FIGURES DO     CALCULATED BY DIVIDING THE TOTAL BROKERAGE COMMISSIONS  PAID
NOT REFLECT THE IMPACT OF CONTINGENT DEFERRED SALES CHARGES.     ON  APPLICABLE PURCHASES AND SALES  OF COMMON STOCKS FOR THE
   (C) TOTAL RETURN IS PRESENTED FOR THE PERIOD FROM  AUGUST     PERIOD  BY THE TOTAL NUMBER  OF RELATED SHARES PURCHASED AND
19, 1994, COMMENCEMENT OF OPERATIONS, TO SEPTEMBER 30, 1994.     SOLD.
   (D) RATIOS PRESENTED FOR THE PERIOD FROM AUGUST 19,  1994     (H)  EFFECTIVE MARCH  1, 1995, THE  FUND ENTERED  INTO A NEW
TO SEPTEMBER 30,  1994 ARE  NOT ANNUALIZED AS  THEY ARE  NOT     INVESTMENT   ADVISORY   AGREEMENT   WITH   ADVANTUS  CAPITAL
INDICATIVE OF ANTICIPATED ANNUAL RESULTS.                        MANAGEMENT, INC. PRIOR  TO MARCH  1, 1995, THE  FUND HAD  AN
   (E)  TOTAL RETURN IS PRESENTED  FOR THE PERIOD FROM MARCH     INVESTMENT ADVISORY AGREEMENT  WITH MIMLIC ASSET  MANAGEMENT
1,  1995, COMMENCMENT OF OPERATIONS,  TO SEPTEMBER 30, 1995.     COMPANY.
</TABLE>
    
 
                                       8
<PAGE>
- ---------------------------------------------------------------
INVESTMENT
OBJECTIVES,
POLICIES
AND RISKS
 
                 Spectrum Fund is a mutual  fund designed for investors  seeking
                 the  most favorable total return (including interest, dividends
and capital  appreciation)  consistent  with the  preservation  of  capital.  To
achieve  this objective, the composition of  Spectrum Fund's portfolio will vary
with prevailing economic conditions. Accordingly, Spectrum Fund's portfolio  may
at  any  given  time  be  primarily  composed  of  equity  securities, including
securities convertible into equity securities, mortgage-related securities, debt
securities, money market securities or any combination thereof. This  investment
objective  of Spectrum Fund may not be changed without approval of a majority of
the outstanding shares of the Fund. The Fund's other investment policies, except
"fundamental" investment restrictions (see  below), may be  changed at any  time
without  shareholder approval,  although shareholders  will be  notified of such
changes. There can be no assurance that the Fund will achieve its objective.
  The securities  in which  Spectrum Fund  invests will  vary depending  on  the
Fund's investment adviser's judgment as to general economic and market policies,
trends  in  investment yields  and  investment rates  and  changes in  fiscal or
monetary policies. For  example, Spectrum  Fund would be  primarily invested  in
debt  securities during periods when the Fund's investment adviser believes that
the total return from investing in debt securities will exceed the total  return
on  equity securities.  In contrast, during  periods when  the Fund's investment
adviser believes that the  overall return on equity  securities will exceed  the
return  on debt securities, both long and short-term, Spectrum Fund may be fully
or substantially invested in equity securities. Further, during periods when the
Fund's investment adviser  believes interest rates  will rise, the  Fund may  be
primarily invested in short-term money market securities.
  Unlike  shareholders in most mutual funds, Spectrum Fund's shareholders confer
substantially more  investment  discretion  on the  Fund's  investment  adviser,
enabling  it to invest in a wide  variety of investment securities to attempt to
achieve Spectrum Fund's objective.
 
- --------------------------------------------
INVESTMENT
POLICIES
  EQUITY SECURITIES.  Spectrum Fund  may invest in equity securities,  including
common stock, preferred stock and securities convertible into equity securities.
In  selecting investments  in equity  securities, the  Fund's investment adviser
looks to an  investment's potential  for both capital  appreciation and  income.
Current  income may also be a significant consideration when yields appear to be
favorable compared  to overall  opportunities  for capital  appreciation.  Thus,
although   most  equity   securities  purchased   by  Spectrum   Fund  would  be
dividend-paying  common  or  preferred  stock,   the  Fund  may  also   purchase
nondividend-paying  equity securities when consistent with the Fund's objective.
Generally, Spectrum Fund  invests in companies  with strong long-term  outlooks.
However,  Spectrum Fund may also  seek to achieve its  objective by investing in
equity securities of companies which, in its investment adviser's judgment, have
temporarily undervalued  securities or  show promise  of substantially  improved
results because of new management, products or markets or other factors.
  MORTGAGE-RELATED  SECURITIES.   Spectrum Fund  may invest  in mortgage-related
securities, including securities which represent interests in pools of  mortgage
loans.   These  loans   are  originated  and   formed  into   pools  by  various
organizations, including the Government National Mortgage Association  ("GNMA"),
the  Federal  National  Mortgage  Association ("FNMA"),  the  Federal  Home Loan
Mortgage Corporation  ("FHLMC")  and  various  private  organizations  including
commercial  banks  and  other  mortgage  lenders.  Payments  on mortgage-related
securities generally consist  of both  principal and  interest, with  occasional
repayments  of  principal due  to  refinancings, foreclosures  or  certain other
events. Certain mortgage-related  securities, such as  GNMA securities,  entitle
the  holder to receive such payments, regardless of whether or not the mortgagor
makes  loan  payments;  certain   mortgage-related  securities,  such  as   FNMA
securities,  guarantee  the timely  payment of  interest and  principal; certain
mortgage-related securities,  such as  FHLMC  securities, guarantee  the  timely
payment   of  interest  and  ultimate   collection  of  principal;  and  certain
mortgage-related securities  contain no  such guarantees  but may  offer  higher
rates  of return. No  mortgage-related securities guarantee  the Fund's yield or
the price of its shares.
 
                                       9
<PAGE>
   
  Spectrum Fund expects  its investments  in mortgage-related  securities to  be
primarily  in high-grade  mortgage-related securities either  (a)issued by GNMA,
FNMA or FHLMC or other United States Government owned or sponsored  corporations
or  (b)rated  A or  better by  Moody's Investors  Services, Inc.  ("Moody's") or
Standard & Poor's Corporation ("S&P") or, if not rated, of equivalent investment
quality as determined by  the Fund's investment  adviser. (See "Debt  Securities
and  Down-Graded  Instruments"  in  the  Statement  of  Additional Information.)
Spectrum Fund may invest in mortgage-related securities rated BBB or Baa by  S&P
or Moody's, respectively, or, if not rated, are of equivalent investment quality
as  determined  by the  Fund's  investment adviser,  when  deemed by  the Fund's
investment adviser to  be consistent with  the Fund's objective.  To the  extent
that  the  Fund  invests in  securities  rated BBB  or  Baa by  S&P  or Moody's,
respectively,  it  will  be  investing  in  securities  which  have  speculative
elements.  For  further  information  about  the  characteristics  and  risks of
mortgage-related securities,  and  for a  description  of the  ratings  used  by
Moody's and S&P, see the Statement of Additional Information.
    
  DEBT  AND  MONEY  MARKET  SECURITIES.    Spectrum  Fund  may  invest  in long,
intermediate   and   short-term   debt   securities   from   various    industry
classifications  and money market instruments.  Such instruments may include the
following:
   
- - Corporate obligations which at the time of
  purchase are rated within the four highest grades assigned by Moody's, S&P  or
  any  other  national  rating service,  or,  if  not rated,  are  of equivalent
  investment quality  as determined  by the  Fund's investment  adviser. To  the
  extent that the Fund invests in securities rated BBB or Baa by S&P or Moody's,
  respectively,  it  will  be  investing in  securities  which  have speculative
  elements. For further information about risks associated with bonds rated  BBB
  or  Baa by S&P or Moody's, respectively, see "Risks of Investing in the Fund."
  For a description of the ratings used by Moody's and S&P, see the Statement of
  Additional Information.
    
   
- - Obligations of, or guaranteed by, the U.S.
  Government, its agencies or instrumentalities.
    
- - Debt obligations of banks.
  In addition  to  the  securities  described above,  which  will  generally  be
long-term,  but may be purchased by Spectrum Fund within one year of the date of
a security's maturity, the Fund may also purchase other high quality  securities
including:
   
- - Obligations (including certificates of deposit and
  bankers  acceptances) of  U.S. banks,  savings and  loan associations, savings
  banks which have  total assets (as  of the  date of their  most recent  annual
  financial   statements  at   the  time  of   investment)  of   not  less  than
  $2,000,000,000; U.S.  dollar  denominated obligations  of  Canadian  chartered
  banks,  London branches of U.S. banks and U.S. branches or agencies of foreign
  banks which meet  the above-stated  asset size;  and obligations  of any  U.S.
  banks,  savings and  loan associations  and savings  banks, regardless  of the
  amount of their  total assets,  provided that  the amount  of the  obligations
  purchased  does not exceed  $100,000 for any  one U.S. bank,  savings and loan
  association or savings bank and the payment of the principal is insured by the
  Federal  Deposit  Insurance  Corporation  or  the  Federal  Savings  and  Loan
  Insurance Corporation.
    
- - Obligations of the International Bank for
  Reconstruction and Development.
   
- - Commercial paper (including variable amount
  master  demand  notes)  issued  by  U.S.  corporations  or  affiliated foreign
  corporations and rated (or guaranteed by  a company whose commercial paper  is
  rated)  at the date of investment Prime-1 by  Moody's or A-1 by S&P or, if not
  rated by either Moody's or S&P, issued by a corporation having an  outstanding
  debt issue rated Aa or better by Moody's or AA or better by S&P and, if issued
  by  an affiliated foreign corporation, such commercial paper (not to exceed in
  the aggregate 10% of the Fund's net assets) is U.S. dollar denominated and not
  subject at the time of purchase to foreign tax withholding.
    
  RESTRICTED AND ILLIQUID SECURITIES.  Spectrum Fund may invest up to 10% of its
net assets  in  securities  restricted  as  to  disposition  under  the  federal
securities laws or otherwise or other illiquid assets. Restricted securities may
be  sold only in a privately negotiated  transaction or in a public offering for
which a registration statement  is in effect under  the Securities Act of  1933.
Because  of such restrictions, the Fund may not be able to dispose of a block of
restricted securities for a substantial period of time or at prices as favorable
as those prevailing in the open market should like securities of an unrestricted
class of the same issuer be freely traded. The Fund may be required to bear  the
expenses of registration of such restricted securities.
 
                                       10
<PAGE>
   
  FOREIGN  SECURITIES.  Spectrum  Fund may also  invest up to  10% of the market
value of the Fund's total assets in securities of foreign issuers which are  not
publicly  traded in the  U.S. (Securities of foreign  issuers which are publicly
traded in  the  U.S., usually  in  the  form of  sponsored  American  Depositary
Receipts,  are not subject  to this 10% limitation.)  Investing in securities of
foreign issuers may result  in greater risk than  that incurred in investing  in
securities  of  domestic issuers.  There  is the  possibility  of expropriation,
nationalization or confiscatory taxation, taxation  of income earned in  foreign
nations  or other taxes imposed with  respect to investments in foreign nations;
foreign exchange  controls  (which may  include  suspension of  the  ability  to
transfer   currency  from  a  given  country),  default  in  foreign  government
securities, political  or social  instability or  diplomatic developments  which
could affect investments in securities of issuers in those nations. In addition,
in  many countries  there is less  publicly available  information about issuers
than is available in reports about  companies in the U.S. Foreign companies  are
not  generally subject to  uniform accounting, auditing  and financial reporting
standards, and  auditing practices  and requirements  may not  be comparable  to
those applicable to U.S. companies. Further, the Fund may encounter difficulties
or  be unable to pursue  legal remedies and obtain  judgments in foreign courts.
Commission rates in  foreign countries,  which are sometimes  fixed rather  than
subject  to negotiation as  in the U.S.,  are likely to  be higher. Further, the
settlement period of securities  transactions in foreign  markets may be  longer
than  in domestic  markets. In many  foreign countries there  is less government
supervision and regulation of business and industry practices, stock  exchanges,
brokers  and listed companies than in the U.S. The foreign securities markets of
many of the countries  in which the  Fund may invest may  also be smaller,  less
liquid,  and subject to  greater price volatility  than those in  the U.S. Also,
some countries may  withhold portions of  interest, dividends and  gains at  the
source.  The  Fund  may also  be  unfavorably  affected by  fluctuations  in the
relative rates of exchange  between the currencies  of different nations  (i.e.,
when  the  currency  being exchanged  has  decreased  in value  relative  to the
currency being  purchased). There  are  further risk  considerations,  including
possible  losses  through  the holding  of  securities in  domestic  and foreign
custodial banks and depositories.
    
   
  An ADR is sponsored if the original issuing company has selected a single U.S.
bank to  serve as  its U.S.  depositary and  transfer agent.  This  relationship
requires  a deposit agreement  which defines the  rights and duties  of both the
issuer and depositary. Companies that sponsor  ADRs must also provide their  ADR
investors  with English translations of company information made public in their
own domiciled  country. Sponsored  ADR investors  also generally  have the  same
voting  rights as ordinary shareholders, barring any unusual circumstances. ADRs
which meet these requirements can be listed on U.S. stock exchanges. Unsponsored
ADRs are created at the initiative of a broker or bank reacting to demand for  a
specific  foreign stock. The broker or  bank purchases the underlying shares and
deposits them in  a depositary.  Unsponsored shares  issued after  1983 are  not
eligible  for U.S. stock  exchange listings. Furthermore,  they do not generally
include voting rights.
    
   
  LOANS OF  PORTFOLIO  SECURITIES.   For  the purpose  of  realizing  additional
income, Horizon Fund may make secured loans of portfolio securities amounting to
not   more  than  20%  of  its  total  assets.  Securities  loans  are  made  to
broker-dealers or financial institutions  pursuant to agreements requiring  that
the  loans be continuously secured by collateral  at least equal at all times to
the value of the securities lent. The collateral received will consist of  cash,
letters or credit or securities issued or guaranteed by the U.S. Government, its
agencies  or instrumentalities.  While the securities  are being  lent, the Fund
will continue to receive the equivalent of the interest or dividends paid by the
issuer on  the  securities,  as  well  as interest  on  the  investment  of  the
collateral  or a fee from the borrower. Although the Fund does not expect to pay
commissions or other front-end fees (including finders fees) in connection  with
loans  of securities (but in some cases may  do so), a portion of the additional
income realized  will be  shared with  the Fund's  custodian for  arranging  and
administering  such loans. The Fund has a right to call each loan and obtain the
securities on five business days'  notice. The Fund will  not have the right  to
vote  securities  while  they  are  being  lent, but  it  will  call  a  loan in
anticipation of any important vote.  The risks in lending portfolio  securities,
as  with  other  extensions of  secured  credit,  consist of  possible  delay in
receiving additional collateral or in the recovery of the securities or possible
loss  of  rights  in  the  collateral  should  the  borrower  fail  financially.
    
 
                                       11
<PAGE>
   
Loans  will only be made to firms deemed  by the Fund's investment adviser to be
of good standing and to have  sufficient financial responsibility, and will  not
be  made  unless,  in  the  judgment  of  the  Fund's  investment  adviser,  the
consideration to  be  earned  from  such  loans  would  justify  the  risk.  The
creditworthiness  of  entities  to  which  the  Fund  makes  loans  of portfolio
securities is monitored by the Fund's investment adviser throughout the term  of
each loan.
    
   
  WARRANTS.   The Fund may invest in warrants;  however, not more than 5% of its
net assets (at the  time of purchase)  will be invested  in warrants other  than
warrants acquired in units or attached to other securities. Of such 5%, not more
than  2% of the Fund assets at the  time of purchase may be invested in warrants
that are not listed on  the New York or  American Stock Exchanges. Warrants  are
instruments  that allow investors  to purchase underlying  shares at a specified
price (exercise price) at a given future date. Warrants are pure speculation  in
that  they  have no  voting rights,  pay no  dividends and  have no  rights with
respect to the assets of the corporation issuing them. The prices of warrants do
not necessarily move parallel to the prices of the underlying securities.
    
  OPTIONS.   Spectrum Fund  may  write covered  call  options and  may  purchase
covered  put options  with respect  to securities  which the  Fund holds  in its
portfolio in an attempt to earn additional  income on its portfolio or to  guard
against  an expected decline in the price of a security. The Fund does not write
call or purchase put options if, as a result, the aggregate market value of  all
portfolio  securities covering such options  exceeds an aggregate amount greater
than 15% of the  market value of its  net assets. The Fund  may purchase a  call
option  only to close out a  covered call option it has  written and may write a
put option only to  close out a put  option which it has  purchased. The use  of
options  contracts involves risk of loss to the Fund due to the possibility that
the prices of the  underlying securities on which  such options are written  may
not move as anticipated.
  WHEN-ISSUED   SECURITIES.    Spectrum  Fund   may  purchase  securities  on  a
"when-issued"  basis  and  may  purchase  or  sell  securities  on  a   "forward
commitment"  basis to  hedge against anticipated  changes in  interest rates and
prices. No more  than 20% of  the value of  the Fund's total  portfolio will  be
committed  to such transactions. Such transactions involve the potential risk of
loss to  the Fund  because interest  rate changes  in the  marketplace prior  to
delivery  of the security may  adversely affect the value  of the security to be
delivered. Such trading practices are separate and distinct from the  underlying
securities  and  involve different  investment  goals, such  as  hedging against
anticipated changes  in interest  rates  and prices,  as  compared to  those  of
investing in the underlying securities.
   
  REPURCHASE  AGREEMENTS.  Spectrum  Fund may enter  into repurchase agreements.
Repurchase agreements are agreements by which the Fund purchases a security  and
obtains  a simultaneous commitment from the seller (a member bank of the Federal
Reserve System  or, if  permitted  by law  or regulation  and  if the  Board  of
Directors  of the  Fund has evaluated  its creditworthiness  through adoption of
standards of  review  or  otherwise,  a securities  dealer)  to  repurchase  the
security at an agreed upon price and date. The creditworthiness of entities with
whom  the  Fund enters  into repurchase  agreements is  monitored by  the Fund's
investment adviser throughout the term  of the repurchase agreement. The  resale
price is in excess of the purchase price and reflects an agreed upon market rate
unrelated to the coupon rate on the purchased security. Such transactions afford
the  Fund the opportunity  to earn a  return on temporarily  available cash. The
Fund's custodian,  or  a  duly  appointed  subcustodian,  holds  the  securities
underlying  any repurchase agreement in a  segregated account or such securities
may be part of the  Federal Reserve Book Entry System.  The market value of  the
collateral  underlying the repurchase  agreement is determined  on each business
day. If  at  any  time the  market  value  of the  collateral  falls  below  the
repurchase  price of the repurchase  agreement (including any accrued interest),
the Fund promptly receives additional  collateral, so that the total  collateral
is  in an amount at  least equal to the  repurchase price plus accrued interest.
While the underlying security may be  a bill, certificate of indebtedness,  note
or  bond  issued  by  an  agency,  authority  or  instrumentality  of  the  U.S.
Government, the  obligation  of  the  seller  is  not  guaranteed  by  the  U.S.
Government.  In the  event of  a bankruptcy or  other default  of a  seller of a
repurchase agreement, the Fund could  experience both delays in liquidating  the
underlying  security and losses, including: (a) possible decline in the value of
the underlying security during  the period while the  Fund seeks to enforce  its
rights thereto; (b) possible
    
 
                                       12
<PAGE>
subnormal  levels of income and lack of access to income during this period; and
(c) expenses of enforcing its rights.
  REVERSE REPURCHASE  AGREEMENTS.   Spectrum Fund  may also  enter into  reverse
repurchase  agreements. Reverse  repurchase agreements  are the  counterparts of
repurchase agreements,  by  which  the  Fund sells  a  security  and  agrees  to
repurchase  the security from the buyer at an agreed upon price and future date.
Because certain of the  incidents of ownership of  the security are retained  by
the Fund, reverse repurchase agreements may be considered a form of borrowing by
the  Fund from  the buyer,  collateralized by  the security.  The Fund  uses the
proceeds of  a  reverse repurchase  agreement  to purchase  other  money  market
securities  either  maturing,  or  under  an  agreement  to  resell,  at  a date
simultaneous  with  or  prior  to  the  expiration  of  the  reverse  repurchase
agreement.  The Fund  utilizes reverse  repurchase agreements  when the interest
income to be earned  from investment of the  proceeds of the reverse  repurchase
transaction exceeds the interest expense of the transaction.
  The use of reverse repurchase agreements by the Fund allows it to leverage its
portfolio.  While  leveraging  offers  the  potential  for  increased  yield, it
magnifies the  risks associated  with  the Fund's  investments and  reduces  the
stability  of the Fund's net asset value per share. To limit this risk, the Fund
will not enter  into a reverse  repurchase agreement if  all such  transactions,
together  with  any money  borrowed,  exceed 5%  of  the Fund's  net  assets. In
addition, when  entering  into  reverse repurchase  agreements,  the  Fund  will
deposit  and maintain in a segregated  account with its custodian liquid assets,
such as cash or cash equivalents and other appropriate short-term securities and
high grade debt obligations, in an  amount equal to the repurchase price  (which
shall include the interest expense of the transaction).
   
  INVESTMENT  RESTRICTIONS.  Spectrum Fund  has certain investment restrictions,
set forth in their  entirety in the Statement  of Additional Information,  which
are  fundamental policies. Without the approval of  the holders of a majority of
the outstanding shares of the Fund, the Fund will not: (i) purchase any security
(other than securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities) if, as a result, more  than 5% of the Fund's total  assets
would  be invested in securities of a single issue, except that up to 25% of the
value of  the  Fund's  total assets  may  be  invested without  regard  to  this
limitation;  (ii)  purchase any  security  if, as  a  result, more  than  25% of
Spectrum Fund's total  assets would  be invested  in the  securities of  issuers
conducting  their  principal business  activities  in a  single  industry; (iii)
borrow money (which includes reverse  repurchase agreements), except from  banks
and  only as a temporary measure for extraordinary or emergency purposes and not
in excess of 5% of its  net assets; (iv) invest more than  a total of 5% of  its
total  assets  in securities  of businesses  (including predecessors)  less than
three years old or  equity securities which are  not readily marketable; or  (v)
invest  more  than  a  total of  10%  of  the Fund's  net  assets  in securities
restricted as to disposition under federal securities laws or otherwise or other
illiquid assets.
    
 
- --------------------------------------------
RISKS OF INVESTING
IN THE  FUND   The Fund's  yield and  the price  of the  Fund's shares  are  not
guaranteed. There is risk in all investment and, depending on the performance of
the  Fund's investments, the value of an  investment in the Fund may decrease as
well as increase.
  The Fund may, with respect to 25% of its total assets, invest in excess of  5%
of  its total assets in securities of a single issuer. To the extent it does so,
the Fund may  be less  well diversified  than other  mutual funds  which do  not
invest in excess of 5% of their total assets in securities of a single issuer.
  Equity  securities, in which the Fund will invest, are more volatile than debt
securities and involve greater  investment risk. Spectrum  Fund, because of  its
investment  objective  and  the  broad discretion  conferred  on  its investment
adviser, is  dependent  on  its  investment adviser's  judgment  as  to  general
economic  and market policies, trends in  investment yields and investment rates
and changes in fiscal or monetary policies as well as in the composition of  the
portfolio.
  The  net asset value  of shares of  Spectrum Fund will  sometimes fluctuate in
response to changes in  interest rates. In general,  when market interest  rates
rise,  prices  of mortgage-related  and  fixed income  securities  decline. When
interest rates decline, prices of  mortgage-related and fixed income  securities
tend to rise. In periods of declining mortgage interest rates, however, the rate
of  prepayment  of  mortgages underlying  mortgage-related  securities  tends to
increase, with the result that such  prepayments must be reinvested by the  Fund
at lower rates. Although mortgage-related
 
                                       13
<PAGE>
securities  are  generally  supported  by some  form  of  government  or private
guarantees and insurance, the Fund's shares are not guaranteed and there can  be
no assurance that private insurers can meet their obligations.
   
  The  Fund may invest  in corporate bonds rated  BBB or Baa  by S&P or Moody's,
respectively. In addition,  the Fund may  invest in mortgage-related  securities
rated BBB or Baa by S&P or Moody's, respectively. To the extent the Fund invests
in  such securities, it will be investing  in securities which may involve risks
and which in fact have speculative elements not associated with bonds rated A or
higher by S&P or Moody's. S&P, in  its description, says that debt rated BBB  is
regarded  as having  an adequate capacity  to pay interest  and repay principal.
Whereas it normally  exhibits adequate protection  parameters, adverse  economic
conditions  or  changing circumstances  are more  likely to  lead to  a weakened
capacity to pay interest and repay principal  for debt in this category than  in
higher  rated categories.  Moody's says that,  with respect to  bonds rated Baa,
certain  protective  elements  may  be  lacking  or  may  be  characteristically
unrealiable  over  any  great  length  of  time.  Such  bonds  lack  outstanding
investment characteristics and in fact have speculative characteristics as well.
    
  Some of the investment policies which  the Fund may employ, such as  investing
in  options,  repurchase  agreements, reverse  repurchase  agreements, illiquid,
restricted and foreign  securities, loans of  portfolio securities,  when-issued
securities  and forward commitments,  involve special risks  not associated with
more traditional investment instruments and policies. See "Investment Policies,"
above, and the  Statement of  Additional Information for  risks associated  with
specific investments.
 
- --------------------------------------------
PORTFOLIO
TURNOVER
 
                Portfolio  turnover  is  the  ratio  of  the  lesser  of  annual
                purchases or  sales  of  portfolio  securities  to  the  average
monthly  value of portfolio  securities, not including  short-term securities. A
100% portfolio turnover  rate would  occur, for example,  if the  lesser of  the
value  of purchases or sales of portfolio  securities for a particular year were
equal to the average monthly value of the portfolio securities owned during such
year.
  The Fund  makes  changes in  its  portfolio securities  which  are  considered
advisable  in light of market conditions.  Frequent changes may result in higher
brokerage and other costs for the  Fund. Spectrum Fund's objective and  policies
may  cause the  annual portfolio  turnover rate  to be  higher than  the average
turnover rate of other  investment companies. The  annual portfolio turnover  is
not expected to exceed 150%.
  Higher  portfolio turnover rates (100% or more) may also result in greater tax
consequences for investors. A fund with a higher rate of portfolio turnover  may
realize  substantial additional  capital gains,  both long-term  and short-term,
which  gains  would   then  result  in   additional  taxable  distributions   to
shareholders. See "Dividends and Capital Gains Distributions" and "Taxes."
  See "Financial Highlights" above, and the Statement of Additional Information,
for more information about the Fund's portfolio turnover policies and rates.
 
- --------------------------------------------
MANAGEMENT
OF THE FUND
 
                   Under  Minnesota law, the Board of  Directors of the Fund has
overall responsibility  for  managing  the  Fund in  good  faith,  in  a  manner
reasonably  believed to be in the best interests  of the Fund, and with the care
an  ordinary  prudent  person  in  like  position  would  exercise  in   similar
circumstances. However, this management may be delegated.
  The  Fund's investment adviser is Advantus Capital. Advantus Capital commenced
its business in June 1994, and provides investment advisory services to each  of
the  other Advantus Funds,  one other mutual  fund (MIMLIC Cash  Fund, Inc.) and
various private  accounts.  Advantus Capital  is  a wholly-owned  subsidiary  of
MIMLIC Management which, prior to March 1, 1995, served as investment adviser to
the Fund. The same portfolio manager and other personnel who previously provided
investment  advisory services to the Fund  through MIMLIC Management continue to
provide the same services through Advantus Capital. MIMLIC Management  commenced
its current business in January, 1984, and provides investment advisory services
to  one  other  mutual  fund  (MIMLIC Series  Fund,  Inc.)  and  various private
accounts. The personnel of Advantus Capital and MIMLIC Management have also  had
experience  in  managing investments  for  The Minnesota  Mutual  Life Insurance
Company ("Minnesota Mutual") and its  separate accounts. MIMLIC Management is  a
 
                                       14
<PAGE>
subsidiary  of Minnesota Mutual, which was organized  in 1880, and has assets of
more than  $9.8 billion.  The  address of  the  Fund, Advantus  Capital,  MIMLIC
Management,  MIMLIC Sales and  Minnesota Mutual is 400  Robert Street North, St.
Paul, Minnesota 55101.
  Advantus Capital  selects and  reviews the  Fund's investments,  and  provides
executive  and other personnel for the management  of the Fund. The Fund's Board
of Directors  supervises  the affairs  of  the  Fund as  conducted  by  Advantus
Capital.
  The  name and title of the portfolio  manager employed by Advantus Capital who
is primarily responsible for the day-to-day management of the Fund's  portfolio,
the  length of time employed in that position, and his other business experience
during the past five years are set forth below:
 
<TABLE>
<CAPTION>
 PORTFOLIO MANAGER   PRIMARY PORTFOLIO       BUSINESS EXPERIENCE DURING
     AND TITLE         MANAGER SINCE               PAST FIVE YEARS
<S>                  <C>                 <C>
- ----------------------------------------------------------------------------
THOMAS A. GUNDERSON   JANUARY 1, 1989    VICE PRESIDENT OF ADVANTUS CAPITAL;
VICE PRESIDENT AND                       INVESTMENT OFFICER OF MIMLIC
PORTFOLIO MANAGER                        MANAGEMENT
</TABLE>
 
   
  The Fund pays Advantus  Capital an advisory  fee equal on  an annual basis  to
 .60% of the Fund's average daily net assets. For this fee, Advantus Capital acts
as  investment adviser  and manager  for the Fund  and pays  the Fund's transfer
agent, dividend disbursing  agent and  redemption agent expenses.  The Fund  has
engaged Minnesota Mutual to act as its transfer agent, dividend disbursing agent
and  redemption  agent.  In  addition,  separate  from  the  investment advisory
agreement, the Fund has  entered into an agreement  with Minnesota Mutual  under
which  Minnesota  Mutual  provides accounting,  legal  and  other administrative
services to the Fund. During  the year ended September  30, 1996, the Fund  paid
Minnesota Mutual $41,200 for such services.
    
  Under the Advisory Agreement with Advantus Capital, Advantus Capital furnishes
the  Fund  office  space  and all  necessary  office  facilities,  equipment and
personnel for servicing the investments of  the Fund, and pays the salaries  and
fees  of all officers and directors of the Fund who are affiliated with Advantus
Capital.  MIMLIC  Sales,  the  underwriter  of  the  Fund's  shares,  bears  all
promotional  expenses in connection with the  distribution of the Fund's shares,
including paying for prospectuses and  statements of additional information  for
new  shareholders, shareholder  reports for  new shareholders  and the  costs of
sales literature. The Fund pays all other expenses not so expressly assumed.
   
  For the year ended  September 30, 1996,  the expenses paid by  the Fund, as  a
percentage  of average  daily net  assets attributable to  Class A,  Class B and
Class C shares, were 1.26%, 1.90% and 1.90%, respectively.
    
 
- --------------------------------------------
THE UNDERWRITER AND
PLANS OF DISTRIBUTION  The Fund  has entered into a Distribution Agreement  with
MIMLIC  Sales pursuant  to which  MIMLIC Sales  acts as  the underwriter  of the
Fund's shares. In addition, the Fund has adopted separate Plans of  Distribution
applicable  to Class A shares, Class B shares and Class C shares relating to the
payment of  certain  distribution expenses  pursuant  to Rule  12b-1  under  the
Investment Company Act of 1940. The Fund, pursuant to its Plans of Distribution,
pays  fees to  MIMLIC Sales equal,  on an annual  basis, to a  percentage of the
Fund's average daily net assets attributable  to Class A shares, Class B  shares
and Class C shares, respectively, as set forth in the following table:
 
<TABLE>
<CAPTION>
      RULE 12B-1 FEE AS PERCENTAGE OF
 AVERAGE DAILY NET ASSETS ATTRIBUTABLE TO
CLASS A           CLASS B           CLASS C
SHARES            SHARES            SHARES
<S>               <C>               <C>
- -------------------------------------------
  .35%             1.00%             1.00%
</TABLE>
 
   
  Such fees are used for distribution-related services for all three classes and
for  servicing of shareholder  accounts in connection  with Class B  and Class C
shares.
    
  All of the  Rule 12b-1 fee  payable by the  Fund and attributable  to Class  A
shares,  and a portion  of the fee payable  with respect to Class  B and Class C
shares equal to .75% of the average daily net assets attributable to such  Class
B  and Class  C shares, respectively,  constitute distribution  fees designed to
compensate MIMLIC Sales for advertising, marketing and distributing the Class A,
Class B and Class  C shares of the  Fund. The distribution fees  may be used  by
MIMLIC  Sales  for the  purpose  of financing  any  activity which  is primarily
intended to  result  in the  sale  of shares  of  the Fund.  For  example,  such
distribution fee may be used by MIMLIC Sales:
 
                                       15
<PAGE>
   
(a)  to compensate  (in addition  to the  sales load)  broker-dealers, including
MIMLIC Sales  and its  registered representatives,  banks, and  other  financial
institutions for their sale of Fund shares; and (b) to pay other advertising and
promotional  expenses in connection with the  distribution of the Fund's shares.
These advertising and promotional expenses include, by way of example but not by
way of limitation, costs  of prospectuses for  other than current  shareholders;
preparation  and  distribution of  sales  literature; advertising  of  any type;
expenses of branch offices  provided jointly by MIMLIC  Sales and any  affiliate
thereof;  and compensation paid to and  expenses incurred by officers, employees
or representatives  of  MIMLIC  Sales  or of  other  broker-dealers,  banks,  or
financial institutions.
    
   
  A  portion of the Rule 12b-1  fee payable with respect to  Class B and Class C
shares of the Fund, equal to .25%  of the average daily net assets  attributable
to  such Class  B and  Class C  shares, respectively,  constitutes a shareholder
servicing fee designed to compensate MIMLIC  Sales for the provision of  certain
services to the holders of Class B and Class C shares. The services provided may
include   personal  services   provided  to  shareholders,   such  as  answering
shareholder inquiries  regarding  the  Fund  and  providing  reports  and  other
information,  and services related  to the maintenance  of shareholder accounts.
MIMLIC Sales may also  use the shareholder servicing  portion of the Rule  12b-1
fee  to make  payments to  qualifying broker-dealers  and financial institutions
that provide such shareholder services.
    
  MIMLIC Sales may  also provide  compensation to certain  institutions such  as
banks  ("Service Organizations") which have purchased shares of the Fund for the
accounts of their clients,  or which have made  the Fund's shares available  for
purchase  by  their clients,  and/or which  provide  continuing service  to such
clients. The Glass-Steagall Act and  other applicable laws, among other  things,
prohibit certain banks from engaging in the business of underwriting securities.
In  such circumstances, MIMLIC Sales, if so requested, will engage such banks as
Service Organizations only to  perform administrative and shareholder  servicing
functions, but at the same fees and other terms applicable to dealers. If a bank
were  prohibited from acting as a  Service Organization, its shareholder clients
would be permitted to remain shareholders of the Fund and alternative means  for
continuing servicing of such shareholders would be sought. In such event changes
in the operation of the Fund might occur and a shareholder serviced by such bank
might  no longer be  able to avail  itself of any  automatic investment or other
services then being provided by the  bank. It is not expected that  shareholders
would  suffer any  adverse financial  consequences as a  result of  any of these
occurrences.
 
- --------------------------------------------
PURCHASE OF
FUND SHARES
 
                    The Fund's shares  may be purchased  at the public  offering
price from MIMLIC Sales (the underwriter of the Fund's shares), and from certain
other  broker-dealers. MIMLIC  Sales reserves the  right to  reject any purchase
order.
  Certificates representing shares purchased are not currently issued.  However,
shareholders  will receive written confirmation of their purchases. Shareholders
will have  the same  rights  of ownership  with respect  to  such shares  as  if
certificates   had  been   issued.  SHAREHOLDERS  WHO   HOLD  PREVIOUSLY  ISSUED
CERTIFICATES REPRESENTING ANY OF THEIR SHARES WILL NOT BE ALLOWED TO REDEEM SUCH
CERTIFICATED SHARES BY TELEPHONE.
  ALTERNATIVE PURCHASE ARRANGEMENTS.  The Fund offers investors the choice among
three classes of shares which offer  different sales charges and bear  different
expenses.  These  alternatives  permit  an  investor  to  choose  the  method of
purchasing shares that the investor believes is most beneficial given the amount
of the purchase, the length of time the investor expects to hold the shares  and
other  circumstances. For  a detailed  discussion of  these alternative purchase
arrangements see "Sales Charges"  below, or for a  summary of these  alternative
purchase arrangements see "Prospectus Summary."
  The  decision as to which class of  shares provides a more suitable investment
for an investor  may depend on  a number  of factors, including  the amount  and
intended length of the investment. Investors making investments that qualify for
a  waiver  of  initial  sales  charges should  purchase  Class  A  shares. Other
investors should consider Class B or Class C shares because all of the  purchase
price  is  invested  immediately.  Investors  who  expect  to  hold  shares  for
relatively shorter periods of time may prefer Class C shares because such shares
may be  redeemed at  any time  without payment  of a  contingent deferred  sales
charge.  Investors who expect to hold shares longer, however, may choose Class B
shares because such shares convert to
 
                                       16
<PAGE>
Class A shares sooner than do Class C shares and thus pay the higher Rule  12b-1
fee for a shorter period.
   
  Purchase  orders for $1,000,000  or more will  be accepted for  Class A shares
only and are not subject to a sales  charge at the time of purchase. Orders  for
Class  B or Class C shares for $1,000,000  or more will be treated as orders for
Class A shares or declined.
    
   
  PURCHASE BY  CHECK.    New  investors  may purchase  shares  of  the  Fund  by
completing  an account application and sending it, together with a check payable
to the Fund, to MIMLIC Sales, at P.O. Box 64809, St. Paul, Minnesota 55101-0809.
    
   
  A purchase is effected, at the price  next determined, on the business day  on
which a purchase order and properly drawn check are received by MIMLIC Sales.
    
  PURCHASE  BY WIRE.   Shares may also  be purchased by  Federal Reserve or bank
wire. This method will result in a more rapid investment in shares of the  Fund.
Before   wiring  any  funds,   contact  MIMLIC  Sales   at  (800)  443-3677  for
instructions. Promptly after  making an  initial purchase by  wire, an  investor
should complete an account application and mail it to MIMLIC Sales.
  Subsequent  purchases may be made in  the same manner. Wire purchases normally
take two or  more hours to  complete, and to  be accepted the  same day must  be
received  by 3:00 p.m. (Central  Time). Banks may charge  a fee for transmitting
funds by wire.
  MINIMUM INVESTMENTS.  A  minimum initial investment of  $250 is required,  and
the minimum subsequent investment is $25.
  PUBLIC  OFFERING PRICE.  The public offering price of the Fund will be the net
asset value per share of the Fund next determined after an order is received  by
MIMLIC  Sales and becomes  effective, plus the applicable  sales charge, if any.
The net asset value per share of each class is determined by dividing the  value
of  the securities, cash  and other assets (including  dividends accrued but not
collected)  of  the  Fund  attributable  to  such  class  less  all  liabilities
(including  accrued expenses but excluding  capital and surplus) attributable to
such class, by the total number of shares of such class outstanding.
   
  The net asset value of the shares of the Fund is determined as of the  primary
closing time for business on the New York Stock Exchange (as of the date of this
Prospectus  the primary close of  trading is 3:00 p.m.  (Central Time), but this
time may be  changed) on each  day, Monday  through Friday, except  (i) days  on
which  changes  in  the  value  of  the  Fund's  portfolio  securities  will not
materially affect the current net asset  value of Fund shares, (ii) days  during
which  no Fund shares  are tendered for  redemption and no  order to purchase or
sell Fund shares is received by  the Fund and (iii) customary national  business
holidays  on which the New York Stock Exchange  is closed for trading (as of the
date hereof,  New  Year's  Day,  Presidents' Day,  Good  Friday,  Memorial  Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day).
    
  Securities,  including put and call options, which are traded over-the-counter
and on a national  exchange will be  valued according to  the broadest and  most
representative market. A security which is only listed or traded on an exchange,
or  for which an  exchange is the  most representative market,  is valued at its
last sale  price (prior  to the  time  as of  which assets  are valued)  on  the
exchange where it is principally traded. Lacking any sales on the exchange where
it  is principally traded on the day of valuation, prior to the time as of which
assets are valued, the  security generally is  valued at the  last bid price  on
that exchange. All other securities for which over-the-counter market quotations
are  readily available are  valued on the  basis of the  last current bid price.
When market quotations are not readily available, such securities are valued  at
fair  value as determined in good faith  by the Board of Directors. Other assets
also are  valued at  fair value  as determined  in good  faith by  the Board  of
Directors.  However, debt  securities may be  valued on the  basis of valuations
furnished by  a  pricing  service  which  utilizes  electronic  data  processing
techniques  to determine valuations for  normal institutional-size trading units
of debt securities, without regard to  sale or bid prices, when such  valuations
are  believed  to  more  accurately  reflect  the  fair  market  value  of  such
securities. Short-term  investments  in  debt securities  are  valued  daily  at
market.
 
- --------------------------------------------
SALES
CHARGES
 
              The  sales charges applicable  to purchases of  the Fund's shares,
              and  also  the  Rule  12b-1  fees  paid  by  the  Fund  which  are
attributable  to  such  shares,  will  vary depending  on  the  class  of shares
purchased, as described below. An investor should carefully consider which sales
charge alternative is most beneficial in the investor's circumstances.
 
                                       17
<PAGE>
- --------------------------------------------
CLASS A SHARES
  The public offering price of Class A shares of the Fund is the net asset value
of the Fund's shares plus the applicable front end sales charge ("FESC"),  which
will  vary with the size  of the purchase. MIMLIC  Sales receives all applicable
sales charges. The Fund receives the net asset value. The current sales  charges
are:
 
   
<TABLE>
<CAPTION>
                                           SALES CHARGE AS A      AMOUNT PAID TO
                                            PERCENTAGE OF:        BROKER-DEALERS
                                                       NET        AS A PERCENTAGE
                                          OFFERING    AMOUNT    OF OFFERING PRICE:
VALUE OF TOTAL INVESTMENT                  PRICE     INVESTED   STANDARD   AFFILIATED*
<S>                                       <C>        <C>        <C>        <C>
- -----------------------------------------------------------------------------------
LESS THAN $50,000                           5.0%      5.26%      4.50%       5.0%
$50,000 BUT LESS THAN $100,000              4.5       4.71       4.05        4.5
$100,000 BUT LESS THAN $250,000             3.5       3.63       3.15        3.5
$250,000 BUT LESS THAN $500,000             2.5       2.56       2.25        2.5
$500,000 BUT LESS THAN $1,000,000           1.5       1.52       1.35        1.5
$1,000,000 AND OVER                        -0-        -0-         .9**        .9**
</TABLE>
    
 
   
 *  AN  AFFILIATED BROKER-DEALER  IS ONE OWNED  BY A GENERAL  AGENT OF MINNESOTA
    MUTUAL.
    
   
**  THESE PAYMENTS ARE PAID BY MIMLIC SALES OR ONE OF ITS AFFILIATES, AT ITS OWN
    EXPENSE, AND NOT BY THE FUND OR ITS SHAREHOLDERS.
    
 
  Note that the sales charge depends on the total value of your investment  (net
asset  value of shares currently  owned plus the cost  of any new investment) in
the Fund, and  not on the  amount of a  single investment. For  example, if  you
already own shares with a net asset value of $40,000 and you decide to invest in
additional  Class A shares having  a public offering price  of $10,000, you will
pay a sales charge equal to  4.5% of your entire additional $10,000  investment,
since the total value of your investment is now $50,000.
   
  RULE 12B-1 FEES.  Class A shares are subject to a Rule 12b-1 fee payable at an
annual  rate of  .35% of average  daily net  assets of the  Fund attributable to
Class A shares. For  additional information about this  fee, see "Management  of
the Fund--The Underwriter and Plans of Distribution," above.
    
  WAIVER OF SALES CHARGES FOR CLASS A SHARES. Officers, directors, full-time and
part-time  employees, sales representatives, and  retirees of the Fund, Advantus
Capital, MIMLIC Management, MIMLIC Sales,  Minnesota Mutual or any of  Minnesota
Mutual's other affiliated companies, any trust, pension or benefit plan for such
persons,  the spouses, siblings, direct ancestors  or direct descendents of such
persons, Minnesota Mutual  and its  affiliates themselves,  advisory clients  of
Advantus  Capital  or  MIMLIC  Management,  employees  of  sales representatives
employed in offices maintained by  such sales representatives, certain  accounts
as  to which a bank or broker-dealer charges an account management fee, provided
the bank  or broker-dealer  has  an agreement  with  MIMLIC Sales,  and  certain
accounts  sold by  registered investment advisers  who charge clients  a fee for
their services are allowed to buy Class A shares of the Fund without paying  the
FESC.
 
- --------------------------------------------
CLASS B SHARES
  Class  B shares of the  Fund are sold without an  initial sales charge so that
the Fund  receives  the full  amount  of  the investor's  purchase.  However,  a
contingent  deferred sales charge ("CDSC") of up to 5% will be imposed if shares
are redeemed  within six  years  of purchase.  For additional  information,  see
"Redemption  of Fund Shares." Class B shares will automatically convert to Class
A shares of the Fund  on the fifteenth day of  the month (or, if different,  the
last  business day prior to  such date) following the  expiration of a specified
holding period. In  addition, Class B  shares are subject  to higher Rule  12b-1
fees  as described below.  The amount of the  CDSC will depend  on the number of
years since the purchase was made, the amount of shares originally purchased and
the dollar amount  being redeemed.  The amount of  the applicable  CDSC and  the
holding  period  prior  to  conversion are  determined  in  accordance  with the
following table:
 
   
<TABLE>
<CAPTION>
SHARES                                     CDSC APPLICABLE IN YEAR               SHARES CONVERT TO CLASS A IN
PURCHASED IN AN AMOUNT            1       2       3       4       5       6      THE MONTH AFTER EXPIRATION OF
<S>                              <C>     <C>     <C>     <C>     <C>     <C>     <C>
- --------------------------------------------------------------------------------------------------------------
LESS THAN $50,000                 5.0%    4.5%    3.5%    2.5%    1.5%    1.5%      84 MONTHS
$50,000 BUT LESS THAN $100,000    4.5     3.5     2.5     1.5     1.5       0       76 MONTHS
$100,000 BUT LESS THAN
 $250,000                         3.5     2.5     1.5     1.5       0       0       60 MONTHS
$250,000 BUT LESS THAN
 $500,000                         2.5     1.5     1.5       0       0       0       44 MONTHS
$500,000 BUT LESS THAN
 $1,000,000                       1.5     1.5       0       0       0       0       28 MONTHS
</TABLE>
    
 
                                       18
<PAGE>
   
  Proceeds from  the CDSC  are  paid to  MIMLIC Sales  and  are used  to  defray
expenses  related  to providing  distribution-related  services to  the  Fund in
connection with the sale of Class B shares, such as the payment of  compensation
to  selected broker-dealers, and for selling  Class B shares. The combination of
the CDSC and  the Rule 12b-1  fee enables the  Fund to sell  the Class B  shares
without  deduction of a sales  charge at the time  of purchase. Although Class B
shares are  sold without  an initial  sales charge,  MIMLIC Sales  pays a  sales
commission to broker-dealers, and to registered representatives of MIMLIC Sales,
who  sell Class  B shares.  The amount  of this  commission may  differ from the
amount of the commission paid  in connection with sales  of Class A shares.  The
higher  Rule 12b-1 fee will cause Class B  shares to have a higher expense ratio
and to  pay  lower  dividends than  Class  A  shares. MIMLIC  Sales  pays  other
broker-dealers  for the sale of Class B  shares in accordance with the following
schedule:
    
 
   
<TABLE>
<CAPTION>
                                                    AMOUNT PAID
                                                        TO
                                                    BROKER-DEALER
                                                    AS   A
                                                    PERCENTAGE
                                                    OF OFFERING
                                                      PRICE:
SHARES PURCHASED IN AN AMOUNT                       STANDARD AFFILIATED*
<S>                                                 <C>    <C>
- ---------------------------------------------------------------
LESS THAN $50,000                                   3.75%  4.17%
$50,000 BUT LESS THAN $100,000                      3.38   3.75
$100,000 BUT LESS THAN $250,000                     2.63   2.92
$250,000 BUT LESS THAN $500,000                     1.88   2.08
$500,000 BUT LESS THAN $1,000,000                   1.13   1.25
</TABLE>
    
 
   
 *  AN  AFFILIATED  BROKER-DEALER   IS  ONE   OWNED  BY  A   GENERAL  AGENT   OF
    MINNESOTA MUTUAL.
    
 
  RULE 12B-1 FEES.  Class B shares are subject to a Rule 12b-1 fee payable at an
annual rate of 1.00% of the average daily net assets of the Fund attributable to
Class  B shares. For  additional information about this  fee, see "Management of
the Fund--The Underwriter and Plans of Distribution," above.
  CONVERSION FEATURE.  On the fifteenth day of the month (or, if different,  the
last  business day prior  to such date)  after the expiration  of the applicable
holding period described in the table  above, Class B shares will  automatically
convert  to Class A shares and will no  longer be subject to a higher Rule 12b-1
fee. Such conversion will be  on the basis of the  relative net asset values  of
the  two classes. Class A shares issued upon such conversion will not be subject
to any FESC or CDSC. Class B shares acquired by exchange from Class B shares  of
another Advantus Load Fund will convert into Class A shares based on the time of
the  initial  purchase. Purchased  Class B  shares  ("Purchased B  Shares") will
convert after the specified  number of months following  the purchase date.  All
Class  B  shares  in a  shareholder's  account  that were  acquired  through the
reinvestment of dividends  and distributions ("Reinvestment  B Shares") will  be
held  in a  separate sub-account.  Each time any  Purchased B  Shares convert to
Class A shares, a pro rata portion (based on the ratio that the total converting
Purchased  B   Shares  bears   to  the   shareholder's  total   converting   and
non-converting  Purchased B Shares  immediately prior to  the conversion) of the
Reinvestment B  Shares then  in the  sub-account will  also convert  to Class  A
shares.
  The  conversion  of  Class  B shares  to  Class  A shares  is  subject  to the
continuing availability of  a ruling  from the  Internal Revenue  Service or  an
opinion of counsel that payment of different dividends by each of the classes of
shares  does not  result in the  Fund's dividends  or distributions constituting
"preferential dividends" under the  Internal Revenue Code  of 1986, as  amended,
and  that  such conversions  do not  constitute taxable  events for  Federal tax
purposes. There  can  be  no assurance  that  such  ruling or  opinion  will  be
available, and the conversion of Class B shares to Class A shares will not occur
if  such ruling or opinion is not available. In such event, Class B shares would
continue to be subject to higher expenses than Class A shares for an  indefinite
period.
 
- --------------------------------------------
CLASS C SHARES
  Class  C shares of the  Fund are sold without an  initial sales charge so that
the Fund receives  the full amount  of the investor's  purchase. Unlike Class  B
shares,  however, no CDSC is  imposed when Class C  shares are redeemed. Class C
shares will automatically convert to Class A shares of the Fund on the fifteenth
day of the month (or,  if different, the last business  day prior to such  date)
following  the expiration  of a specified  holding period. In  addition, Class C
shares are  subject to  higher Rule  12b-1 fees  (as described  below), and  are
subject  to such higher fees for a longer period than are Class B shares because
of a longer holding  period prior to conversion.  The applicable holding  period
prior to
 
                                       19
<PAGE>
conversion is determined in accordance with the following table:
 
<TABLE>
<CAPTION>
                                                                      SHARES
                                                                    CONVERT TO
                                                                    CLASS A IN
                                                                     THE MONTH
SHARES                                                                 AFTER
 PURCHASED IN AN AMOUNT                                            EXPIRATION OF
<S>                                                                <C>
- --------------------------------------------------------------------------------
LESS THAN $50,000                                                    96 MONTHS
$50,000 BUT LESS THAN $100,000                                       88 MONTHS
$100,000 BUT LESS THAN $250,000                                      72 MONTHS
$250,000 BUT LESS THAN $500,000                                      56 MONTHS
$500,000 BUT LESS THAN $1,000,000                                    40 MONTHS
</TABLE>
 
  The  longer period during which the Rule 12b-1 fee is charged enables the Fund
to sell the Class C  shares without deduction of a  sales charge at the time  of
purchase  and without imposing a CDSC at redemption. MIMLIC Sales does not pay a
sales commission to broker-dealers, or  to registered representatives of  MIMLIC
Sales,  who sell Class  C shares. The higher  Rule 12b-1 fee  will cause Class C
shares to have a higher  expense ratio and to pay  lower dividends than Class  A
shares.
  RULE 12B-1 FEES.  Class C shares are subject to a Rule 12b-1 fee payable at an
annual rate of 1.00% of the average daily net assets of the Fund attributable to
Class  C shares. For  additional information about this  fee, see "Management of
the Fund-The Underwriter and Plans of Distribution," above.
  CONVERSION FEATURE.  On the fifteenth day of the month (or, if different,  the
last  business day prior  to such date)  after the expiration  of the applicable
holding period described in the table  above, Class C shares will  automatically
convert  to Class A shares and will no  longer be subject to a higher Rule 12b-1
fee. Such conversion will be  on the basis of the  relative net asset values  of
the  two classes. Class A shares issued upon such conversion will not be subject
to any FESC or CDSC. Class C shares acquired by exchange from Class C shares  of
another Advantus Load Fund will convert into Class A shares based on the time of
the  initial  purchase. Purchased  Class C  shares  ("Purchased C  Shares") will
convert after the specified  number of months following  the purchase date.  All
Class  C  shares  in a  shareholder's  account  that were  acquired  through the
reinvestment of dividends  and distributions ("Reinvestment  C Shares") will  be
held  in a  separate sub-account.  Each time any  Purchased C  Shares convert to
Class A shares, a pro rata portion (based on the ratio that the total converting
Purchased  C   Shares  bears   to  the   shareholder's  total   converting   and
non-converting  Purchased C Shares  immediately prior to  the conversion) of the
Reinvestment C  Shares then  in the  sub-account will  also convert  to Class  A
shares.
  The  conversion  of  Class  C shares  to  Class  A shares  is  subject  to the
continuing availability of  a ruling  from the  Internal Revenue  Service or  an
opinion of counsel that payment of different dividends by each of the classes of
shares  does not  result in the  Fund's dividends  or distributions constituting
"preferential dividends" under the  Internal Revenue Code  of 1986, as  amended,
and  that  such conversions  do not  constitute taxable  events for  Federal tax
purposes. There  can  be  no assurance  that  such  ruling or  opinion  will  be
available, and the conversion of Class C shares to Class A shares will not occur
if  such ruling or opinion is not available. In such event, Class C shares would
continue to be subject to higher expenses than Class A shares for an  indefinite
period.
 
- --------------------------------------------
   
OTHER PAYMENTS TO
BROKER-DEALERS   The commissions  paid to broker-dealers  in connection with the
sale of Class  A and  Class B  shares are  as described  above. A  broker-dealer
receiving more than 90% of the sales charge may be deemed to be an "underwriter"
under the Securities Act of 1933, as amended. Broker-Dealers selling Class A and
Class  C shares  will receive  Rule 12b-1 distribution  fees which  equal, on an
annual basis, .25% and .75%, respectively, of the net asset values  attributable
to  such shares.  Rule 12b-1  service fees will  also be  paid to broker-dealers
selling Class B and Class C shares in amounts equal, on an annual basis, to .25%
and .25%, respectively, of the net asset values attributable to such shares.
    
   
  In addition,  MIMLIC  Sales  or  Minnesota Mutual  will  pay  to  "affiliated"
broker-dealers  (i.e.,  broker-dealers  owned  by  general  agents  of Minnesota
Mutual), based uniformly  on the  sale of  all classes  of Fund  shares by  such
broker-dealers,    credits   which   allow   such   broker-dealers'   registered
representatives who  are  responsible for  such  broker-dealers' sales  of  Fund
shares to attend conventions and other meetings sponsored by Minnesota Mutual or
its  affiliates for the  purpose of promoting  the sale of  the insurance and/or
investment products offered by Minnesota Mutual and its affiliates. Such credits
may cover the registered representatives' transportation, hotel  accommodations,
meals,  registration fees and  the like. Affiliated  broker-dealers earning such
credits will  be allowed  to elect  to receive  from MIMLIC  Sales or  Minnesota
    
 
                                       20
<PAGE>
   
Mutual,  in  lieu of  such  credits, cash  in  an amount  equal  to the  cost of
providing such credits.
    
 
- --------------------------------------------
SPECIAL
PURCHASE
PLANS
 
               The following are  alternative purchase plans  applicable to  the
               Fund,  all  of which  offer the  possibility  of a  reduced sales
charge:
- - Letter of Intent. (See instructions on application.)
- - Combined purchases with spouse, children, and/or
  single trust estates--all accounts, whether invested in Class A shares,  Class
  B  shares or  Class C  shares, or any  combination, are  combined to determine
  sales charge. It is the obligation of each investor desiring this discount  in
  sales  charge to notify MIMLIC Sales, through  his or her dealer or otherwise,
  that he or she is entitled to the discount.
- - Group Purchases--individuals who are members
  of a qualified group  (which must meet criteria  established by MIMLIC  Sales)
  may  purchase shares at the reduced sales charge applicable to the group taken
  as a whole.
- - Combined investments in all Advantus Load
  Funds--all accounts, whether  invested in Class  A shares, Class  B shares  or
  Class C shares, or any combination, are combined to determine sales charge.
- - Systematic Investment Plan--voluntary periodic
  purchases  enable  an investor  to lower  his  or her  average cost  per share
  through the principle of "dollar cost averaging."
  The Fund also offers an Automatic Investment Plan, which allows an investor to
automatically invest  a  specified amount  in  the  Fund each  month.  For  more
information  on  any of  these plans,  contact  MIMLIC Sales  or a  MIMLIC Sales
representative.
 
- --------------------------------------------
EXCHANGE AND
TELEPHONE TRANSFER
OF FUND SHARES
 
                             A shareholder can  exchange some or  all of his  or
her  Class A, Class B and Class C  shares in the Fund, including shares acquired
by reinvestment of dividends, for shares of  the same class of any of the  other
Advantus  Load Funds (provided that the  shareholder has an already open account
in such other Advantus Load Fund), and can thereafter re-exchange such exchanged
shares back for shares of the same class of the Fund, provided that the  minimum
amount  which may be transferred is $250. The exchange will be made on the basis
of the relative net asset values without the imposition of any additional  sales
load.  When  Class B  shares  acquired through  the  exchange are  redeemed, the
shareholder will be  treated as if  no exchange  took place for  the purpose  of
determining the CDSC period and applying the CDSC.
  Class  A, Class  B and  Class C  shares may  also be  exchanged for  shares of
Advantus Money Market Fund, Inc. ("Money  Market Fund") at net asset values.  No
CDSC  will  be imposed  at the  time of  any  such exchange  of Class  B shares;
however, the Money Market Fund shares acquired in any such exchange will  remain
subject  to the CDSC otherwise applicable to such  Class B shares as of the date
of exchange, and the period  during which such shares  of Money Market Fund  are
held  will not be included  in the calculation of the  CDSC due at redemption of
such Money  Market Fund  shares or  any  reacquired Class  B shares,  except  as
follows.  MIMLIC Sales is currently  waiving the entire Rule  12b-1 fee due from
Money Market Fund. In the  event MIMLIC Sales begins  to receive any portion  of
such  fee, either (i) the  time period during which  shares of Money Market Fund
acquired in  exchange for  Class  B shares  are held  will  be included  in  the
calculation  of the CDSC due at redemption, or (ii) such time period will not be
included but the amount of  the CDSC will be reduced  by the amount of any  Rule
12b-1 payments made by Money Market Fund with respect to those shares.
   
  Shares  of Money Market Fund  acquired in an exchange for  Class A, Class B or
Class C shares from any of the  Advantus Load Funds may also be re-exchanged  at
relative net asset values for Class A, Class B and Class C shares, respectively,
of  the Fund. Class  C shares re-acquired  in this manner  will have a remaining
holding period  prior  to  conversion  equal to  the  remaining  holding  period
applicable  to the prior Class C shares  at time of the initial exchange. Shares
of Money Market Fund not acquired in  an exchange from any of the Advantus  Load
Funds  may be exchanged at relative net asset values for either Class A, Class B
or Class C shares  of the Fund,  subject to the sales  charge applicable to  the
class selected.
    
   
  The  exchange privilege is  available only in states  where such exchanges may
legally be  made  (at the  present  time the  Fund  believes this  privilege  is
available  in all states).  An exchange may be  made by written  request or by a
pre-authorized telephone call
    
 
                                       21
<PAGE>
   
(see "Telephone Transactions"). Up to four  exchanges each calendar year may  be
made  without charge. A $7.50 service charge  will be imposed on each subsequent
exchange and/or telephone transfer. No  service charge is imposed in  connection
with systematic exchange plans. However, the Fund reserves the right to restrict
the   frequency  of--or  otherwise  modify,   condition,  terminate,  or  impose
additional charges upon--the exchange and/or telephone transfer privileges, upon
60 days' prior notice to  shareholders. Telephone transfers and other  exchanges
can  only be made between Advantus Fund accounts having identical registrations.
An exchange is considered to be a sale of shares for federal income tax purposes
on which an investor may realize a long- or short-term capital gain or loss. See
"Taxes" for a discussion of the effect of redeeming shares within 90 days  after
acquiring  them and subsequently  acquiring new shares  in any mutual  fund at a
reduced sales charge.
    
 
- --------------------------------------------
   
SYSTEMATIC EXCHANGE PLAN
  Shareholders of the Fund may elect  to have shares of the Fund  systematically
exchanged  for shares  of any  of the other  Advantus Funds  (provided that such
Advantus Fund accounts must  have identical registrations)  on a monthly  basis.
The minimum amount which may be exchanged on such a systematic basis is $25. The
terms  and conditions otherwise applicable  to exchanges generally, as described
above, also apply to such systematic exchange plans.
    
 
- --------------------------------------------
REDEMPTION OF
FUND SHARES
 
   
                      Registered holders of shares of the Fund may redeem  their
shares at the per share net asset value next determined following receipt by the
Fund  (at its mailing address listed on  the cover page) of a written redemption
request signed by all shareholders exactly  as the account is registered (and  a
properly endorsed stock certificate if one has been issued). Class A and Class C
shares may be redeemed without charge. A contingent deferred sales charge may be
applicable  upon redemption  of Class B  shares (see  "Contingent Deferred Sales
Charge," below). Both share certificates and  stock powers, if any, tendered  in
redemption  must  be  endorsed  and  executed exactly  as  the  Fund  shares are
registered. If the redemption proceeds are less than $25,000 and are to be  paid
to  the registered holder and sent to the address of record for that account, or
if the  written redemption  request is  from pre-authorized  trustees of  plans,
trusts  and other tax-exempt organizations and  the redemption proceeds are less
than $25,000, no  signature guarantee  is required. However,  if the  redemption
proceeds  are  $25,000 or  more or  are to  be  paid to  someone other  than the
registered holder, or are to be mailed  to an address other than the  registered
shareholder's  address, or the shares are to be transferred, or the request does
not come from such a plan trustee,  the owner's signature must be guaranteed  by
an  eligible  guarantor  institution,  including (1)  national  or  state banks,
savings associations, savings  and loan associations,  trust companies,  savings
banks,  industrial  loan companies  and credit  unions; (2)  national securities
exchanges,  registered  securities  associations  and  clearing  agencies;   (3)
securities broker-dealers which are members of a national securities exchange or
a  clearing  agency  or which  have  minimum  net capital  of  $100,000;  or (4)
institutions that participate in the Securities Transfer Agent Medallion Program
("STAMP") or other recognized signature medallion program. A signature guarantee
is also required in connection with any redemption if, within the 30-day  period
prior  to receipt of the redemption  request, instructions have been received to
change the  shareholder's address  of record.  The Fund  reserves the  right  to
require signature guarantees on all redemptions. Any certificates should be sent
to the Fund by certified mail. Payment will be made as soon as possible, but not
later  than seven days  after receipt of a  properly executed written redemption
request (and any certificates).  The amount received by  the shareholder may  be
more or less than the shares' original cost.
    
   
  If  stock certificates have not been issued,  and if no signature guarantee is
required, shareholders may also submit  their signed written redemption  request
to  the  Fund  by  facsimile  (FAX)  transmission.  The  Fund's  FAX  number  is
1-612-223-4100.
    
  CONTINGENT DEFERRED  SALES CHARGE.   The  CDSC applicable  upon redemption  of
Class  B shares will be calculated  on an amount equal to  the lesser of the net
asset value of the shares  at the time of purchase  or their net asset value  at
the  time of  redemption. No charge  will be  imposed on increases  in net asset
value above the initial purchase price. In addition, no charge will be  assessed
on  shares derived from reinvestment of dividends or capital gains distributions
or on shares held for longer than the
 
                                       22
<PAGE>
applicable CDSC period. See "Sales Charges-- Class B Shares," above.
  In determining whether a CDSC is  payable with respect to any redemption,  the
calculation  will be determined  in the manner  that results in  the lowest rate
being charged. Therefore, it will be assumed that shares that are not subject to
the CDSC are  redeemed first, shares  subject to  the lowest level  of CDSC  are
redeemed  next, and so forth. If a shareholder owns Class A or Class C shares in
addition to Class B  shares, then absent a  shareholder choice to the  contrary,
Class C shares will first be redeemed in full, and Class B shares not subject to
a CDSC will next be redeemed in full, prior to any redemption of Class A shares.
Class A shares will also be redeemed in full, absent a shareholder choice to the
contrary, prior to any redemption of Class B shares which are subject to a CDSC.
   
  The  CDSC does not  apply to: (1)  redemption of Class  B shares in connection
with the automatic conversion to Class A shares; (2) redemption of shares when a
Fund exercises its right to liquidate  accounts which are less than the  minimum
account size; and (3) redemptions in the event of the death or disability of the
shareholder within the meaning of Section 72(m)(7) of the Internal Revenue Code.
The  CDSC will also not apply to  certain exchanges. See "Exchange and Telephone
Transfer of Fund Shares," above.
    
   
  TELEPHONE REDEMPTION.    The Fund's  shareholders  may elect  this  option  by
completing  the appropriate portion of the application, and may redeem shares by
calling  the   Fund's  transfer   agent   at  1-800-443-3677   (see   "Telephone
Transactions").  The  maximum  amount  which may  be  redeemed  by  telephone is
$25,000. The proceeds will  be sent by  check to the address  of record for  the
account.  If the amount is $1,000 or more, and if the shareholder has designated
a bank account, the proceeds may  be wired to the shareholder's designated  bank
account,  and the prevailing wire charge (currently  $5.00) will be added to the
amount redeemed from the Fund. The Fund reserves the right to modify,  terminate
or impose charges upon the telephone redemption privilege.
    
   
  DELAY  IN PAYMENT OF REDEMPTION PROCEEDS.  Payment of redemption proceeds will
ordinarily be made as soon as possible and within the periods of time  described
above.  However, an exception to this is that if redemption is requested after a
purchase by non-guaranteed funds (such as a personal check), the Fund will delay
mailing the  redemption  check  or  wiring  proceeds  until  it  has  reasonable
assurance that the purchase check has cleared (good payment has been collected).
This delay may be up to 14 days from the purchase date.
    
   
  The Fund has the right to redeem the shares in inactive accounts which, due to
redemptions  and not to decreases in market  value of the shares in the account,
have a total current value of less  than $150. Before redeeming an account,  the
Fund  will mail to the shareholder a  written notice of its intention to redeem,
which will give the investor an opportunity to make an additional investment. If
no additional investment is received by the Fund within 60 days of the date  the
notice was mailed, the shareholder's account will be redeemed.
    
 
- --------------------------------------------
   
TELEPHONE
TRANSACTIONS
    
 
   
                     Shareholders  of  the  Fund are  permitted  to  exchange or
redeem the Fund's shares by telephone.  See "Exchange and Telephone Transfer  of
Fund  Shares" and "Redemption of Fund Shares" for further details. The privilege
to initiate such transactions by  telephone is not made available  automatically
but must be elected by a shareholder on the account application.
    
   
  Shareholders  may initiate  telephone transactions  by telephoning  the Fund's
transfer agent, toll free, at  1-800-443-3677, Monday through Friday, from  8:00
a.m.  to 4:45 p.m. (Central Time). Telephone transaction requests received after
3:00 p.m. (Central  Time) will  be treated as  received the  next business  day.
Telephone  exchanges  may be  made only  between  Advantus Fund  accounts having
identical registrations. The maximum amount  which may be redeemed by  telephone
is  $25,000. During periods  of marked economic  or market changes, shareholders
may experience difficulty in implementing a telephone exchange or redemption due
to a  heavy volume  of telephone  calls. In  such a  circumstance,  shareholders
should  consider  submitting a  written request  while  continuing to  attempt a
telephone exchange  or  redemption.  The  Fund reserves  the  right  to  modify,
terminate or
impose  charges upon  the telephone exchange  and redemption  privileges upon 60
days' prior notice to shareholders.
    
   
  The Fund and  its transfer  agent, Minnesota Mutual,  will not  be liable  for
following  instructions communicated by telephone  which they reasonably believe
to be genuine; provided, however, that the
    
 
                                       23
<PAGE>
   
Fund and  Minnesota Mutual  will employ  reasonable procedures  to confirm  that
instructions  communicated by  telephone are genuine,  and that if  they do not,
they  may  be  liable  for  any   losses  due  to  unauthorized  or   fraudulent
instructions.  The procedures for processing telephone transactions include tape
recording of  telephone  instructions,  asking shareholders  for  their  account
number  and a personal identifying number, and providing written confirmation of
such transactions.
    
 
- --------------------------------------------
REINSTATEMENT
PRIVILEGE
 
                      Shareholders who redeem shares in the Fund have a one-time
privilege to  apply  their redemption  proceeds  (at  no sales  charge)  to  the
purchase  of shares of any of the  Advantus Load Funds by notifying MIMLIC Sales
within 90 days  after their redemption.  All shares  issued as a  result of  the
reinstatement  privilege applicable to redemptions of Class A and Class B shares
will be issued only as Class A shares. Any CDSC incurred in connection with  the
prior  redemption (within  90 days) of  Class B  shares will not  be refunded or
re-credited to the shareholder's account. Shareholders who redeem Class C shares
and exercise their reinstatement privilege will  be issued only Class C  shares,
which  shares will have a remaining holding  period prior to conversion equal to
the remaining  holding  period  applicable  to  the  prior  Class  C  shares  at
redemption.  See  "Taxes" for  a discussion  of the  effect of  redeeming shares
within 90 days after acquiring them and subsequently acquiring new shares in any
mutual fund at a reduced sales charge.
 
- --------------------------------------------
DIVIDENDS AND
CAPITAL GAINS
DISTRIBUTIONS
 
                      The policy  of  the Fund  is  to pay  dividends  from  net
                      investment  income  quarterly.  Any  net  realized capital
gains are generally distributed once a year, during December. Distributions paid
by the Fund, if any, with respect to Class A, Class B and Class C shares will be
calculated in the same manner, at the same time, on the same day and will be  in
the  same amount, except that  the higher Rule 12b-1  fees applicable to Class B
and Class C  shares will  be borne  exclusively by  such shares.  The per  share
distributions  on Class B  and Class C shares  will be lower  than the per share
distributions on  Class A  shares as  a result  of the  higher Rule  12b-1  fees
applicable to Class B and Class C shares.
   
  Any  dividend payments or net capital gains distributions made by the Fund are
in the form of additional  shares of the same class  of the Fund rather than  in
cash,  unless a shareholder  specifically requests the Fund  in writing that the
payment be made in cash. The distribution  of these shares is made at net  asset
value on the payment date of the dividend, without any sales or other charges to
the shareholder. The taxable status of income dividends and/or net capital gains
distributions  is not affected by  whether they are reinvested  or paid in cash.
Authorization to pay dividends in cash may  be made on the application form,  or
at any time by letter.
    
  Upon  written  request to  the  Fund, a  shareholder  may also  elect  to have
dividends from the Fund invested without sales charge in shares of Money  Market
Fund  or share of the same class of another of the Advantus Load Funds (provided
that such Advantus Fund accounts must  have identical registrations) at the  net
asset  value of such other  Advantus Fund on the  payable date for the dividends
being distributed. To use this privilege of investing dividends from the Fund in
shares of another of  the Advantus Funds, shareholders  must maintain a  minimum
account  value of $250 in both the Fund and the Advantus Fund in which dividends
are reinvested.
 
- --------------------------------------------
TAXES
 
          The  following  is   a  general   summary  of   certain  federal   tax
considerations  affecting the Fund  and its shareholders. No  attempt is made to
present a  detailed  explanation  of  the  tax treatment  of  the  Fund  or  its
shareholders,  and  the discussion  here  is not  intended  as a  substitute for
careful tax planning.
   
  During the year ended  September 30, 1996 the  Fund fulfilled, and intends  to
continue  to fulfill, the  requirements of Subchapter M  of the Internal Revenue
Code of 1986, as amended (the "Code"), as a regulated investment company. If  so
qualified, the Fund will not be liable for federal income taxes to the extent it
distributes its taxable income to its shareholders.
    
  Distributions  of investment  company taxable  income from  the Fund generally
will be taxable to shareholders as  ordinary income, regardless of whether  such
distributions  are paid  in cash  or are  invested in  additional shares  of the
Fund's  stock.   A  distribution   of  net   capital  gain   (a  "capital   gain
distribution"), whether paid in cash or reinvested in
 
                                       24
<PAGE>
   
shares,  is taxable to shareholders as long-term capital gain, regardless of the
length of time a shareholder has held his or her shares or whether such gain was
realized by  the  Fund before  the  shareholder  acquired such  shares  and  was
reflected  in the price paid for the shares. However, if a shareholder holds for
less than six  months a share  with respect  to which a  long-term capital  gain
distribution  has been made, any loss on the  sale of such share will be treated
as a  long-term capital  loss  to the  extent  that the  shareholder  previously
recognized  long-term capital gain.  Long-term capital gains  of individuals are
taxed at a maximum rate of 28%,  while the highest marginal regular tax rate  on
ordinary income for individuals is 39.6%
    
  Some  or all of the dividend distributions  from the Fund will qualify for the
70% dividend received deduction for corporations.
  Prior to purchasing shares of  the Fund, prospective shareholders (except  for
tax  qualified  retirement plans)  should consider  the  impact of  dividends or
capital gains distributions  which are expected  to be announced,  or have  been
announced  but not paid. Any such  dividends or capital gains distributions paid
shortly after a purchase of shares by an investor prior to the record date  will
have  the effect of reducing the per share  net asset value by the amount of the
dividends or distributions. All or a portion of such dividends or distributions,
although in effect a return of capital, is subject to taxation.
  If shares of  the Fund  are sold  or otherwise  disposed of  more than  twelve
months  from  the  date of  acquisition,  the  Fund shareholder  will  realize a
long-term capital gain  or loss  equal to  the difference  between the  purchase
price  and the sale price of the shares disposed of, if, as is usually the case,
the Fund shares are a capital asset in the hands of the Fund shareholder.
  The Code provides  that a  shareholder who pays  a sales  charge in  acquiring
shares  of a mutual  fund, redeems those  shares within 90  days after acquiring
them, and subsequently  acquires new  shares in any  mutual fund  for a  reduced
sales  charge or no sales charge (pursuant to a reinvestment right acquired with
the first shares), may  not take into  account the sales  charge imposed on  the
first  acquisition, to the  extent of the  reduction in the  sales charge on the
second acquisition, for purposes of computing gain or loss on disposition of the
first acquired shares. The  amount of sales charge  disregarded under this  rule
will,  however, be treated as incurred in connection with the acquisition of the
second acquired shares.
  Before investing  in  the Fund,  an  investor  should consult  a  tax  adviser
concerning  the  consequences  of any  local  and  state tax  laws,  and  of any
retirement plan offering tax benefits.
   
  Shareholders of the  Fund receive  an annual statement  detailing federal  tax
information.  Distributions by the Fund, including the amount of any redemption,
are reported  to shareholders  in  such annual  statement  and to  the  Internal
Revenue Service to the extent required by the Code.
    
   
  The  Fund is required  by federal law  to withhold 31%  of reportable payments
(including dividends,  capital  gain  distributions, and  redemptions)  paid  to
certain  accounts whose owners have not  complied with IRS regulations. In order
to avoid this backup withholding requirement, each shareholder will be asked  to
certify  on the  shareholder's account application  that the  social security or
taxpayer identification number provided is  correct and that the shareholder  is
not subject to backup withholding for previous underreporting to the IRS.
    
 
- --------------------------------------------
INVESTMENT
PERFORMANCE
 
                    Advertisements  and other sales literature  for the Fund may
refer to "yield," "average annual  total return" and "cumulative total  return."
Performance  quotations are computed separately for Class A, Class B and Class C
shares of the  Fund. All quotations  of yield, average  annual total return  and
cumulative  total  return  are based  upon  historical information  and  are not
intended to indicate future performance. The investment return on and  principal
value of an investment in the Fund will fluctuate, so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
  The  advertised yield of the Fund will be based upon a 30-day period stated in
the advertisement. Yield is calculated by dividing the net investment income per
share  (as  defined   under  Securities  and   Exchange  Commission  rules   and
regulations) earned during the period by the maximum offering price per share on
the last day of the period. The result is then "annualized" using a formula that
provides for semi-annual compounding of income.
  Both  average annual total return  and cumulative total return  are based on a
hypothetical  $1,000   payment   to  the   Fund   at  the   beginning   of   the
 
                                       25
<PAGE>
advertised  period. Average  annual total  return is  calculated by  finding the
average annual compounded rate of return  over the period that would equate  the
initial  investment to the  ending redeemable value.  Cumulative total return is
the percentage change between the public offering price of one Fund share at the
beginning of a period and the  net asset value of that  share at the end of  the
period  with dividend and  capital gain distributions  treated as reinvested. In
calculating both average annual  total return and  cumulative total return,  the
maximum  initial  or deferred  sales charge  is  deducted from  the hypothetical
investment and all dividends and distributions during the period are assumed  to
be  reinvested. Such  average annual  total return  and cumulative  total return
figures may also be  accompanied by average annual  total return and  cumulative
total  return figures, for the  same or other periods,  which do not reflect the
deduction of any sales charges.
 
- --------------------------------------------
COMPARATIVE
RETURNS   In addition  to advertising  yield, average  annual total  return  and
cumulative  total return, comparative performance information of the types shown
below may be used from time to time in advertising the Fund's shares. The Fund's
performance figures  shown in  the following  table do  not reflect  the  Fund's
maximum  5% initial sales charge or  contingent deferred sales charge applicable
to Class A and Class B  shares, respectively. Such figures do, however,  reflect
the  reinvestment  of dividend  and  capital gains  distributions  in additional
shares and all recurring fees, such as investment management fees. Such  figures
also  reflect the voluntary  absorption of certain  expenses of the  Fund by the
Fund's investment adviser described under  "Management of the Fund." (See  also,
"Calculation of Performance Data" in the Statement of Additional Information.)
 
   
<TABLE>
<CAPTION>
                                                     CHANGE FOR CALENDAR YEAR
FUND/INDEX                                 1996      1995      1994      1993      1992
<S>                                       <C>       <C>       <C>       <C>       <C>
- -----------------------------------------------------------------------------------------
SPECTRUM FUND:
  CLASS A SHARES                           11.57%     24.1%     -2.2%      5.5%      6.3%
  CLASS B SHARES                           11.06      23.3       N/A       N/A       N/A
  CLASS C SHARES                           10.87       N/A       N/A       N/A       N/A
LIPPER BALANCED FUND INDEX                 13.01      24.6      -2.5      10.7       7.2
LIPPER FLEXIBLE FUND INDEX                 14.05      16.8      -2.7      11.9       7.5
</TABLE>
    
 
- --------------------------------------------
   
OTHER HISTORICAL ANNUAL
COMPOUND RETURNS*
    
 
   
<TABLE>
<CAPTION>
                                       LAST 15 YEARS           LAST 30 YEARS           LAST 71 YEARS
                                          1982-96                 1967-96                 1926-96
<S>                                   <C>                     <C>                     <C>
- -----------------------------------------------------------------------------------------------------
SMALL COMPANY STOCKS                              14.4%                   15.0%                   12.9%
COMMON STOCKS (S&P 500)                           16.8%                   11.9%                   10.7%
LONG-TERM CORP. BONDS                             13.7%                    8.2%                    5.6%
LONG-TERM GOVT. BONDS                             13.3%                    7.8%                    5.1%
U.S. TREASURY BILLS                                6.5%                    6.7%                    3.7%
INFLATION RATE                                     3.6%                    5.4%                    3.1%
</TABLE>
    
 
   
   * SOURCE: IBBOTSON ASSOCIATES
    
 
- ---------------------------------------------------------------
AVERAGE ANNUAL
 
TOTAL  RETURNS  The table below shows the average annual total returns for Class
A, Class  B and  Class C  shares of  the Fund  for the  periods indicated.  Such
figures  reflect the deduction of the Fund's maximum 5% sales load applicable to
Class A  shares, the  contingent deferred  sales charge  applicable to  Class  B
shares  and the  voluntary absorption  of certain  expenses of  the Fund  by the
Fund's investment adviser described under  "Management of the Fund." (See  also,
"Calculation of Performance Data" in the Statement of Additional Information.)
 
                                       26
<PAGE>
 
   
<TABLE>
<CAPTION>
                               AVERAGE ANNUAL TOTAL
                                  RETURN FOR THE
                               PERIODS SHOWN ENDING
                                SEPTEMBER 30, 1996
                                                SINCE
                           1 YEAR   5 YEARS   INCEPTION
<S>                        <C>      <C>       <C>
- -------------------------------------------------------
CLASS A SHARES (1)           8.0%     8.9%     10.6%
CLASS B SHARES (2)           8.1%     N/A      13.0%
CLASS C SHARES (3)          12.9%     N/A      16.3%
</TABLE>
    
 
   (1) INCEPTION WAS NOVEMBER 16, 1987.
   (2) INCEPTION WAS AUGUST 19, 1994.
   
   (3) INCEPTION WAS MARCH 1, 1995
    
- ---------------------------------------------------------------
RANKINGS AND
 
RATINGS  The Fund may from time to time also advertise rankings or other ratings
of  the Fund  as determined  by Morningstar,  Inc., Lipper  Analytical Services,
Inc., INVESTORS  DAILY, Wiesenberger  Financial Services,  FORTUNE MAGAZINE,  or
other mutual fund rating firms.
  Shareholders of the Fund may also telephone MIMLIC Sales at (800) 443-3677 for
current  quotations of yield,  average annual total  return and cumulative total
return.
  For additional information regarding the calculation of yield, average  annual
total  return  and  cumulative  total return  see  the  Statement  of Additional
Information.
 
- --------------------------------------------
ADDITIONAL PERFORMANCE
 
   
INFORMATION  Further information about the performance of the Fund is  contained
in  the  Fund's Annual  Report to  Shareholders, which  may be  obtained without
charge by writing or calling the Fund  at the address or telephone number  shown
on the cover of this Prospectus.
    
 
- --------------------------------------------
GENERAL
INFORMATION
 
                    The  Fund was  incorporated in  October 1984  as a Minnesota
corporation. The Fund's name  was changed, by vote  of its shareholders, to  its
current  name in February 1995. The Fund's  authorized capital stock is of three
classes (Class A, Class B and Class C), common shares, with a par value of  $.01
per share. All shares of the Fund are nonassessable, fully transferable and have
one  vote and  equal rights to  share in dividends  and assets of  the Fund. The
shares of the Fund possess no preemptive or conversion rights. Cumulative voting
is not authorized for the Fund. This means that the holders of more than 50%  of
the  shares of  the Fund voting  for the election  of directors of  the Fund can
elect 100% of  the directors  if they choose  to do  so, and in  such event  the
holders  of  the  remaining shares  of  the Fund  will  be unable  to  elect any
directors.
   
  On September 30, 1996, Minnesota Mutual  and its subsidiaries owned shares  in
each class of shares of the Fund as set forth in the following table:
    
   
<TABLE>
<CAPTION>
                                             NUMBER OF SHARES OWNED
              SHARES                         BY MINNESOTA MUTUAL AND
            OUTSTANDING                           SUBSIDIARIES
<S>        <C>          <C>          <C>          <C>          <C>
- ------------------------------------------------------------------------------
 
<CAPTION>
  CLASS A      CLASS B      CLASS C      CLASS A      CLASS B       CLASS C
<S>        <C>          <C>          <C>          <C>          <C>
- ------------------------------------------------------------------------------
3,789,331       508,117       87,506       30,819        4,303           823
</TABLE>
    
 
  Minnesota Mutual, Advantus Capital, MIMLIC Management and MIMLIC Sales are all
organized as Minnesota corporations.
  The  Fund does not  hold annual or periodically  scheduled regular meetings of
shareholders. Regular and  special shareholder  meetings are held  only at  such
times and with such frequency as required by law. Minnesota corporation law does
not  require an annual meeting; instead, it  provides for the Board of Directors
to convene shareholder  meetings when it  deems appropriate. In  addition, if  a
regular  meeting  of  shareholders  has not  been  held  during  the immediately
preceding fifteen months, a  shareholder or shareholders holding  3% or more  of
the  voting shares of the  Fund may demand a  regular meeting of shareholders of
the Fund by written notice of demand given to the chief executive officer or the
chief financial officer of the Fund. Within 30 days after receipt of the  demand
by  one of those officers, the Board  of Directors shall cause a regular meeting
of shareholders to be called and held no later than 90 days after receipt of the
demand, all at the expense of the Fund. Additionally, the Investment Company Act
of 1940 requires shareholder votes for all amendments to fundamental  investment
policies  and  restrictions  and  for  all  investment  advisory  contracts  and
amendments thereto.
  The Fund sends to  its shareholders a six-month  unaudited and annual  audited
financial  report of  the Fund, which  includes a list  of investment securities
held by  the Fund.  Shareholder inquiries  should be  directed to  a  registered
representative  of the shareholder's broker-dealer, or to the Underwriter or the
Fund at the  telephone number or  mailing address  listed on the  cover of  this
Prospectus.
 
                                       27
<PAGE>
- --------------------------------------------
COUNSEL AND
INDEPENDENT
AUDITORS
 
   
                    The  firm of Dorsey  & Whitney LLP,  220 South Sixth Street,
                    Minneapolis, Minnesota 55402, is the general counsel for the
Fund. KPMG  Peat Marwick  LLP, 4200  Norwest Center,  90 South  Seventh  Street,
Minneapolis, Minnesota 55402, are the independent auditors for the Fund.
    
 
- --------------------------------------------
CUSTODIAN
 
                 First  Trust National  Association, 180 East  Fifth Street, St.
Paul, Minnesota 55101, acts as custodian of the securities held by the Fund.
 
                                       28
<PAGE>
ADVANTUS SPECTRUM FUND, INC.
FUND INFORMATION:
 
INVESTMENT ADVISER
Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
(612) 292-5923
 
   
UNDERWRITER
    
   
MIMLIC Sales Corporation
P.O. Box 64809
St. Paul, Minnesota 55101-0809
(612) 228-4833
(800) 443-3677
    
 
   
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
    
   
The Minnesota Mutual Life Insurance Company
P.O. Box 64132
St. Paul, Minnesota 55164-0132
(800) 443-3677
    
 
CUSTODIAN
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
 
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
 
GENERAL COUNSEL
   
Dorsey & Whitney LLP
    
 
                        [ADVANTUS -TM- FAMILY OF FUNDS]

<PAGE>



















                PART B.  INFORMATION REQUIRED IN A STATEMENT OF
                           ADDITIONAL INFORMATION

















<PAGE>







                       STATEMENT OF ADDITIONAL INFORMATION






                          ADVANTUS HORIZON FUND, INC.
                          ADVANTUS SPECTRUM FUND, INC.
                    ADVANTUS MORTGAGE SECURITIES FUND, INC.
                        ADVANTUS MONEY MARKET FUND, INC.
                            ADVANTUS BOND FUND, INC.
                        ADVANTUS CORNERSTONE FUND, INC.
                         ADVANTUS ENTERPRISE FUND, INC.
                   ADVANTUS INTERNATIONAL BALANCED FUND, INC.



                                 January 31, 1997








   
       This Statement of Additional Information is not a prospectus.  This 
Statement of Additional Information relates to the separate Prospectuses dated 
January 31, 1997 and should be read in conjunction therewith.  A copy of each 
Prospectus may be obtained from MIMLIC Sales Corporation, P.O. Box 64809, St. 
Paul, Minnesota 55101-0809 (telephone (800) 443-3677).
    





   
THIS STATEMENT OF ADDITIONAL INFORMATION MUST BE ACCOMPANIED OR PRECEDED BY A 
COPY OF THE CURRENT PROSPECTUS AND ANNUAL REPORT TO SHAREHOLDERS FOR EACH OF 
THE ADVANTUS FUNDS NAMED ABOVE. 
    
<PAGE>


                               TABLE OF CONTENTS



<TABLE>
<S>                                                                                                        <C>
GENERAL INFORMATION AND HISTORY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
       Horizon Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
       Spectrum Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
       Mortgage Securities Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
       Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
       Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
       Cornerstone Fund and Enterprise Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
       International Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
       Additional Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
       All Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

DIRECTOR LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
       General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
       Control and Management of Advantus Capital and MIMLIC Sales . . . . . . . . . . . . . . . . . . . . .26
       Investment Advisory Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
       International Fund Sub-Adviser -- Templeton Counsel . . . . . . . . . . . . . . . . . . . . . . . . .29
       International Fund Investment Sub-Advisory Agreement -- Templeton Counsel . . . . . . . . . . . . . .30
       Distribution Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
       Payment of Certain Distribution Expenses of the Funds . . . . . . . . . . . . . . . . . . . . . . . .32

MONEY MARKET FUND AMORTIZED COST METHOD OF PORTFOLIO VALUATION . . . . . . . . . . . . . . . . . . . . . . .35

PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

CAPITAL STOCK AND OWNERSHIP OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45

HOW TO BUY SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

NET ASSET VALUE AND PUBLIC OFFERING PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
</TABLE>


<PAGE>
<TABLE>
<S>                                                                                                        <C>
REDUCED SALES CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
       Right of Accumulation-Cumulative Purchase Discount. . . . . . . . . . . . . . . . . . . . . . . . . .50
       Letter of Intent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
       Combining Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
       Purchases of Class A shares by Certain Persons Affiliated with the Fund, Advantus Capital MIMLIC
       Management, Templeton Counsel, MIMLIC Sales, Minnesota Mutual, or Any of Minnesota Mutual's Other
       Affiliated Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51

SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
       Open Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
       Systematic Investment Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
       Group Systematic Investment Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
       Automatic Investment Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
       Group Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
       Retirement Plans Offering Tax Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
       Systematic Withdrawal Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
       Exchange and Telephone Transfer Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

REDEMPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
       Reinstatement Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56

DISTRIBUTIONS AND TAX STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

APPENDIX A - MORTGAGE-RELATED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
       Underlying Mortgages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
       Liquidity and Marketability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
       Average Life. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
       Yield Calculations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2

APPENDIX B - BOND AND COMMERCIAL PAPER RATINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
       Bond Ratings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
       Commercial Paper Ratings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2

APPENDIX C - FUTURES CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
       Use of Futures Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
       Description of Futures Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
       Risks in Futures Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3
       Example of Futures Contract Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3
       Example of Futures Contract Purchase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-4
       Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-5


</TABLE>

<PAGE>

                  GENERAL INFORMATION AND HISTORY

       Advantus Horizon Fund, Inc. ("Horizon Fund"), Advantus Spectrum Fund, 
Inc. ("Spectrum Fund"), Advantus Mortgage Securities Fund, Inc. ("Mortgage 
Securities Fund"), Advantus Money Market Fund, Inc. ("Money Market Fund"), 
Advantus Bond Fund, Inc. ("Bond Fund"), Advantus Cornerstone Fund, Inc. 
("Cornerstone Fund"), Advantus Enterprise Fund, Inc. ("Enterprise Fund") and 
Advantus International Balanced Fund, Inc. ("International Fund"), 
collectively referred to as the "Advantus Funds" or the "Funds," are open-end 
diversified investment companies, commonly called mutual funds.  Each of the 
Advantus Funds, excluding Money Market Fund, offers more than one class of 
shares (the "Advantus Load Funds").  The Advantus Load Funds currently offer 
three classes of shares (Class A, Class B and Class C).  Each class is sold 
pursuant to different sales arrangements and bears different expenses.  The 
Funds are incorporated as Minnesota corporations. Horizon Fund, Spectrum 
Fund, Mortgage Securities Fund and Money Market Fund were incorporated in 
October 1984.  Bond Fund was incorporated in January 1987, and Cornerstone 
Fund, Enterprise Fund and International Fund were incorporated in January 
1994.

                      INVESTMENT OBJECTIVES AND POLICIES

       The investment objective and policies of each of the Funds are 
summarized on the front page of each Fund's Prospectus and are set forth in 
detail in the text of each Fund's Prospectus under "Investment Objectives, 
Policies and Risks."

WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS

       Mortgage Securities Fund, Spectrum Fund and Bond Fund may each 
purchase securities offered on a "when-issued" basis and may purchase or sell 
securities on a "forward commitment" basis.  When such transactions are 
negotiated, the price, which is generally expressed in yield terms, is fixed 
at the time the commitment is made, but delivery and payment for the 
securities takes place at a later date.  Normally, the settlement date occurs 
within two months after the transaction, but delayed settlements beyond two 
months may be negotiated.  During the period between a commitment to purchase 
by the Fund and settlement, no payment is made for the securities purchased 
by the Fund and, thus, no interest accrues to the Fund from the transaction.

       The use of when-issued transactions and forward commitments enables 
the Fund to hedge against anticipated changes in interest rates and prices.  
For instance, in periods of rising interest rates and falling prices, the 
Fund might sell securities in its portfolio on a forward commitment basis to 
limit its exposure to falling prices.  In periods of falling interest rates 
and rising prices, the Fund might sell a security in its portfolio and 
purchase the same or a similar security on a when-issued or forward 
commitment basis, thereby fixing the purchase price to be paid on the 
settlement date at an amount below that to which the Fund anticipates the 
market price of such security to rise and, in the meantime, obtaining the 
benefit of investing the proceeds of the sale of its portfolio security at 
currently higher cash yields.  Of course, the success of this strategy 
depends upon the ability of the Fund's investment adviser to correctly 
anticipate increases and decreases in interest rates and prices of 
securities.  If the adviser anticipates a rise in interest rates


                                  -1-
<PAGE>

and a decline in prices and, accordingly, the Fund sells securities on a 
forward commitment basis in order to hedge against falling prices, but in 
fact interest rates decline and prices rise, the Fund will have lost the 
opportunity to profit from the price increase.  If the adviser anticipates a 
decline in interest rates and a rise in prices, and, accordingly, the Fund 
sells a security in its portfolio and purchases the same or a similar 
security on a when-issued or forward commitment basis in order to enjoy 
currently high cash yields, but in fact interest rates increase and prices 
fall, the Fund will have lost the opportunity to profit from investment of 
the proceeds of the sale of the security at the increased interest rates.  
The likely effect of this hedging strategy, whether the Fund's investment 
adviser is correct or incorrect in its prediction of interest rate and price 
movements, is to reduce the chances of large capital gains or losses and 
thereby reduce the likelihood of wide variations in the Fund's net asset 
value.

       When-issued securities and forward commitments may be sold prior to 
the settlement date, but the Fund enters into when-issued and forward 
commitments only with the intention of actually receiving or delivering the 
securities, as the case may be.  The Fund may hold a when-issued security or 
forward commitment until the settlement date, even if the Fund will incur a 
loss upon settlement.  To facilitate transactions in when-issued securities 
and forward commitments, the Fund's custodian bank maintains, in a separate 
account of the Fund, liquid assets, such as cash, short-term securities and 
other appropriate high grade debt obligations, having a value equal to, or 
greater than, any commitments to purchase securities on a when-issued or 
forward commitment basis and, with respect to forward commitments to sell 
portfolio securities of the Fund, the portfolio securities themselves.  If 
the Fund, however, chooses to dispose of the right to acquire a when-issued 
security prior to its acquisition or dispose of its right to deliver or 
receive against a forward commitment, it can incur a gain or loss.  (At the 
time the Fund makes the commitment to purchase or sell a security on a 
when-issued or forward commitment basis, it records the transaction and 
reflects the value of the security purchased or, if a sale, the proceeds to 
be received, in determining its net asset value.)  No when-issued or forward 
commitments with respect to debt securities will be made if, as a result, 
more than 20% of the value of the Fund's total assets would be committed to 
such transactions.

INTEREST RATE FUTURES CONTRACTS

       Mortgage Securities Fund and Bond Fund may each also enter into 
contracts for the future delivery of fixed income securities commonly 
referred to as "interest rate futures contracts."  These futures contracts 
will be used only as a hedge against anticipated interest rate changes.  The 
Fund will sell futures contracts to protect against expected increases in 
interest rates and purchase futures contracts to offset the impact of 
interest rate declines.  The Fund will not enter into an interest rate 
futures contracts if immediately thereafter (a) more than 5% of the value of 
the Fund's total assets will be committed to initial margin or (b) the sum of 
the then aggregate futures market prices of financial instruments required to 
be delivered upon open futures contract sales and the aggregate purchase 
prices under open futures contract purchases would exceed 30% of the value of 
the Fund's total assets.  In addition, when purchasing interest rate futures 
contracts, the Fund will deposit and maintain in a separate account with its 
custodian cash or cash equivalents in an amount equal to the market value of 
such futures contracts, less any margin deposited on the Fund's long 
position, to cover the Fund's obligation.


                                   -2-
<PAGE>

       The Commodity Futures Trading Commission (the "CFTC"), a Federal 
agency, regulates trading activity on the exchanges pursuant to the Commodity 
Exchange Act, as amended.  The CFTC requires the registration of "commodity 
pool operators," defined as any person engaged in a business which is of the 
nature of an investment trust, syndicate, or similar form or enterprise, and 
who, in connection therewith, solicits, accepts, or receives from others, 
funds, securities, or property for the purpose of trading in any commodity 
for future delivery on or subject to the rules of any contract market.  The 
CFTC has adopted certain regulations which exclude from the definition of 
"commodity pool operator" an investment company, like the Fund, registered 
with the Securities and Exchange Commission under the Investment Company Act 
of 1940, and any principal or employee thereof, which investment company 
files a notice of eligibility with the CFTC and the National Futures 
Association containing certain information about the investment company and 
representing that it (i) will use commodity futures or commodity options 
contracts solely for bona fide hedging purposes, (ii) will not enter into 
commodity futures and commodity options contracts for which the aggregate 
initial margin and premiums exceed 5% of the fair market value of its assets, 
after taking into account unrealized profits and unrealized losses on any 
such contracts it has entered into, (iii) will not be, and has not been, 
marketing participations to the public as or in a commodity pool or otherwise 
as or in a vehicle for trading in the commodity futures or commodity options 
markets, (iv) will disclose in writing to each prospective participant the 
purpose of and the limitations on the scope of the commodity futures and 
commodity options trading in which the entity intends to engage, and (v) will 
submit to such special calls as the CFTC may make to require the qualifying 
entity to demonstrate compliance with these representations.  The "bona fide 
hedging" transactions and positions authorized by these regulations mean 
transactions or positions in a contract for future delivery on any contract 
market, where such transactions or positions normally represent a substitute 
for transactions to be made or positions to be taken at a later time in a 
physical marketing channel, and where they are economically appropriate to 
the reduction of risks in the conduct and management of a commercial 
enterprise, and where they arising from (i) the potential change in the value 
of assets which a person owns, produces, manufactures, processes or 
merchandises or anticipates owning, producing, manufacturing, processing or  
merchandising, (ii) the potential change in the value of liabilities a person 
owes or anticipates incurring, or (iii) the potential change in the value of 
services which a person provides, purchases or anticipates providing or 
purchasing; provided that, notwithstanding the foregoing, no transactions or 
positions shall be classified as bona fide hedging unless their purpose is to 
offset price risk incidental to commercial cash or spot operations and such 
positions are established and liquidated in an orderly manner in accordance 
with sound commercial practices and unless certain statements are filed with 
the CFTC with respect to such transactions or positions. The Fund intends to 
meet these requirements, or such other requirements as the CFTC or its staff 
may from time to time issue, in order to render registration of the Fund and 
any of its principals and employees as a commodity pool operator unnecessary.

       The Fund will incur certain risks in employing interest rate futures 
contracts to protect against cash market price volatility.  One risk is the 
prospect that futures prices will correlate imperfectly with the behavior of 
cash prices.  Another risk is that the Fund's investment adviser would be 
incorrect in its expectation as to the extent of various investment rate 
movements or the time span within which the movements take place.


                                  -3-
<PAGE>

       For a detailed discussion of futures contracts and the risks of 
investing therein, see Appendix C to this Statement of Additional Information.

OPTIONS - HORIZON FUND, CORNERSTONE FUND AND ENTERPRISE FUND

       The Fund may write covered call options which are traded on national 
securities exchanges with respect to common stocks in its portfolio ("covered 
options") in an attempt to earn additional current income on its portfolio or 
to guard against an expected decline in the price of a security.  When the 
Fund writes a covered call option, it gives the purchaser of the option the 
right to buy the underlying security at the price specified in the option 
(the "exercise price") at any time during the option period.  If the option 
expires unexercised, the Fund realizes income, typically in the form of 
short-term capital gain, to the extent of the amount received for the option 
(the "premium").  If the option is exercised, a decision over which the Fund 
has no control, the Fund must sell the underlying security to the option 
holder at the exercise price.  By writing a covered option, the Fund 
foregoes, in exchange for the premium less the commission ("net premium"), 
the opportunity to profit during the option period from an increase in the 
market value of the underlying security above the exercise price.  The Fund 
does not write call options in an aggregate amount greater than 15% of its 
net assets.  

       The Fund purchases call options only to close out a position.  When an 
option is written on securities in the Fund's portfolio and it appears that 
the purchaser of that option is likely to exercise the option and purchase 
the underlying security, it may be considered appropriate to avoid 
liquidating the Fund's position, or the Fund may wish to extinguish a call 
option sold by it so as to be free to sell the underlying security. In such 
instances the Fund may purchase a call option on the same security with the 
same exercise price and expiration date which had been previously written.  
Such a purchase would have the effect of closing out the option which the 
Fund has written.  The Fund realizes a short-term capital gain if the amount 
paid to purchase the call option is less than the premium received for 
writing a similar option.  Generally, the Fund realizes a short-term loss if 
the amount paid to purchase the call option is greater than the premium 
received for writing the option.  If the underlying security has 
substantially risen in value, it may be difficult or expensive to purchase 
the call option for the closing transaction.

OPTIONS - MORTGAGE SECURITIES FUND

       Mortgage Securities Fund may purchase put and call options written by 
others covering the types of securities in which the Fund may invest.  The 
Fund may not write put or call options.  The Fund utilizes put and call 
options to provide protection against adverse price or yield effects from 
anticipated changes in prevailing interest rates.

       A put option gives the buyer of such option, upon payment of a 
premium, the right to deliver a specified amount of a security to the writer 
of the option on or before a fixed date at a predetermined price.  A call 
option gives the purchaser of the option, upon payment of a premium, the 
right to call upon the writer to deliver a specified amount of a security on 
or before a fixed date at a predetermined price. The Fund will not purchase a 
put or call option if, as a result, the aggregate cost of all outstanding 
options purchased and held by the Fund plus all other illiquid assets held by 
the Fund would exceed 10% of the value of the Fund's net assets.  If an 


                                   -4-
<PAGE>

option is permitted to expire without being sold or exercised, its premium 
would be lost by the Fund.

       In buying a call, the Fund would be in a position to realize a gain 
if, during the option period, the price of the security increased by an 
amount in excess of the premium paid.  It would realize a loss if the price 
of the security declined or remained the same or did not increase during the 
period by more than the amount of the premium.  By buying a put, the Fund 
would be in a position to realize a gain if, during the option period, the 
price of the security declines in an amount in excess of the premium paid.  
It would realize a loss if the price of the security increased or remained 
the same or did not decrease during that period by more than the amount of 
the premium.

       The Fund generally purchases options in negotiated transactions with 
the writers of the options.  The Fund purchases options only from investment 
dealers and other financial institutions (such as commercial banks or savings 
and loan institutions) deemed creditworthy by its investment adviser.  The 
Fund may dispose of an option by entering into a closing sale transaction 
with the writer of the option.  A closing sale transaction terminates the 
obligation of the writer of the option and does not result in the ownership 
of an option.  The Fund realizes a profit or loss from a closing sale 
transaction if the premium received from the transaction is more than or less 
than the cost of the option.  Options purchased by the Fund in negotiated 
transactions are illiquid and there is no assurance that the Fund will be 
able to effect a closing sale transaction at a time when its investment 
adviser believes it would be advantageous to do so.

OPTIONS - SPECTRUM FUND AND BOND FUND

       The Fund may write (sell) "covered" call options and purchase 
"covered" put options.  The Fund will not purchase call options except to 
close out call options previously written by the Fund, nor will it write put 
options except to close out put options previously purchased by the Fund.  
The effect of writing covered call options and purchasing covered put options 
will be to reduce the effect of price fluctuations of the securities owned by 
the Fund (and involved in the options) on the Fund's net asset value per 
share.  Another effect may be the generation of additional revenues in the 
form of premiums received for writing covered call options.

       Spectrum Fund does not write covered call or purchase covered put 
options if, as a result, the aggregate market value of all portfolio 
securities covering such options exceeds an aggregate amount greater than 15% 
of the market value of its net assets.  Bond Fund will not write a covered 
call option or purchase a put option if, as a result, the aggregate market 
value of all portfolio securities covering call options or subject to put 
options exceeds 25% of the market value of the Fund's net assets.  In 
addition, Bond Fund will purchase covered put options (and purchase call 
options to close out call options previously written by the Fund) only to the 
extent that the aggregate premiums paid for all such options held do not 
exceed 2% of net assets.

       A call option gives the holder (buyer) the "right to purchase" a 
security at a specified price (the exercise price) at any time until a 
certain date (the expiration date).  So long as the obligation of the writer 
of a call option continues, he may be assigned an exercise notice by the 
broker-dealer through whom such option was sold, requiring him to deliver the 
underlying security


                                      -5-
<PAGE>


against payment of the exercise price. This obligation terminates upon the 
expiration of the call option, or such earlier time at which the writer 
effects a closing purchase transaction by repurchasing the option which he 
previously sold.  To secure his obligation to deliver the underlying security 
in the case of a call option, a writer is required to deposit in escrow the 
underlying security or other assets in accordance with the rules of the 
Exchanges and of the Options Clearing Corporation (the "OCC"), an institution 
created to interpose itself between buyers and sellers of options.  A put 
option gives the holder (buyer) the "right to sell" a security at a specified 
price (the exercise price) at any time until a certain date (the expiration 
date).

       The Fund will only write "covered" call and purchase "covered" put 
options.  This means that the Fund will only write a call option or purchase 
a put option on a security which the Fund already owns.  Each Fund will only 
write covered call options and purchase covered put options in 
exchange-traded standard contracts issued by the OCC, or write covered call 
options and purchase covered put options in the over-the-counter ("OTC") 
market in negotiated transactions entered into directly with investment 
dealers meeting the creditworthiness criteria (described below) of the Fund's 
investment adviser.  Exchange-traded options are third-party contracts and 
standardized strike prices and expiration dates, and are purchased from a 
clearing corporation such as the OCC.  Technically, the OCC assumes the other 
side of every purchase and sale transaction on an Exchange and, by doing so, 
guarantees the transaction.  In contrast, OTC options are two-party contracts 
with price and terms negotiated between buyer and seller.  The Fund relies on 
the dealer from whom it purchases an OTC option to perform if the option is 
exercised, and will therefore only negotiate an OTC option with a dealer 
subject to the following criteria:  (i) the broker-dealer or its predecessor 
must have been in business at least 15 years; (ii) the broker-dealer must 
have, in the judgment of the Fund's investment adviser, a reputation for 
sound management and ethical business practices; (iii) the broker-dealer must 
be registered with the Securities and Exchange Commission; and (iv) the 
broker-dealer must have at least $50 million in "Excess Capital."  ("Excess 
Capital" is that portion of a firm's permanent capital which is in excess of 
the minimum capital required under the Uniform Net Capital Rule of the 
Securities and Exchange Commission.)  Broker-dealer subsidiaries of companies 
having at least $1 billion in net worth shall also be considered 
creditworthy, in the event of a lack of publicly available financial 
information.  To the extent the Fund invests in OTC options for which there 
is no secondary market it will be investing in securities which are illiquid 
and therefore subject to the Fund's 10% limitation on aggregate investment in 
restricted or other illiquid securities (see "Investment Restrictions").

       The writing of covered call options is a conservative investment 
technique believed to involve relatively little risk (in contrast to the 
writing of naked or uncovered options) but capable of enhancing total return. 
 When writing a covered call option, the Fund, in return for the premium, 
gives up the opportunity for profit from a price increase in the underlying 
security above the exercise price, but conversely retains the risk of loss 
should the price of the security decline.  If a call option which the Fund 
has written expires, the Fund will realize a gain in the amount of the 
premium; however, such gain may be offset by a decline in the market value of 
the underlying security during the option period.  If the call option is 
exercised, the Fund will realize a gain or loss from the sale of the 
underlying security.  The Fund will purchase put options involving portfolio 
securities only when the Fund's investment adviser believes that a temporary 
defensive position is desirable in light of market conditions, but does not 
desire to sell the


                                      -6-
<PAGE>

portfolio security.  Therefore, the purchase of put options will be utilized 
to protect the Fund's holdings in an underlying security against a 
substantial decline in market value.  Such protection is, of course, only 
provided during the life of the put option when the Fund, as the holder of 
the put option, is able to sell the underlying security at the put exercise 
price regardless of any decline in the underlying security's market price.  
By using put options in this manner, the Fund will reduce any profit it might 
otherwise have realized in its underlying security by the premium paid for 
the put option and by transaction costs.

       The Fund will purchase a call option only to close out a covered call 
option it has written (a "closing purchase transaction"), and will write a 
put option only to close out a put option it has purchased (a "closing sale 
transaction").  Such closing transactions will be effected in order to 
realize a profit on an outstanding call or put option, to prevent an 
underlying security from being called or put, or, to permit the sale of the 
underlying security.  Furthermore, effecting a closing transaction will 
permit the Fund to write another call option, or purchase another put option, 
on the underlying security with either a different exercise price or 
expiration date or both.  If the Fund desires to sell a particular security 
from its portfolio on which it has written a call option, or purchased a put 
option, it will seek to effect a closing transaction prior to, or 
concurrently with, the sale of the security.  There is, of course, no 
assurance that the Fund will be able to effect such closing transactions at a 
favorable price.  If the Fund cannot enter into such a transaction, it may be 
required to hold a security that it might otherwise have sold, in which case 
it would continue to be at market risk on the security.  This could result in 
higher transaction costs, including brokerage commissions.  The Fund will pay 
brokerage commissions in connection with the writing or purchase of options 
to close out previously written options.  Such brokerage commissions are 
normally higher than those applicable to purchases and sales of portfolio 
securities.

WARRANTS WITH CASH EXTRACTIONS

       The International Fund may invest up to 5% of its assets in warrants, 
including warrants used in conjunction with the cash extraction method.  
Warrants are instruments that allow investors to purchase underlying shares 
at a specified price (exercise price) at a given future date.  The market 
price of a warrant is determined by market participants by the addition of 
two distinct components:  (1) the price of the underlying shares less the 
warrant's exercise price, and (2) the warrant's premium that is attributed to 
volatility and leveraging power.  If an investor wishes to replicate an 
underlying share, the investor can use the warrant with cash extraction 
method by purchasing warrants and holding cash.  The cash component would be 
determined by subtracting the market price of the warrant from the underlying 
share price.

       For example, ASSUME one share for company "Alpha" has a current share 
price of $40 and issued warrants can be converted one for one share at an 
exercise price of $31 exercisable two years from today.  Also ASSUME that the 
market price of the warrant is $10 ($40 - $31 + $1) because investors are 
willing to pay a premium ($1) for previously stated reasons.  If an investor 
wanted to replicate an underlying share by engaging in a warrant with cash 
extraction strategy, the amount of cash the investor would need to hold for 
every warrant would be $30 ($40 - $10 = $30).  A warrant with cash extraction 
is, thus, simply a synthetically created quasi-convertible bond.


                                       -7-
<PAGE>

       If an underlying share issues no or a low dividend and has an 
associated warrant with a market price that is low relative to its share 
price, a warrant with cash extraction may provide attractive cash yields and 
minimize capital loss risk, provided the underlying share is also considered 
a worthy investment.  For example, ASSUME Alpha's share is an attractive 
investment opportunity and its share pays no dividend.  Given the information 
regarding Alpha provided above, also ASSUME that short-term cash currently 
yields 5% per year and that the investor plans to hold the investment at 
least two years, barring significant near-term capital appreciation.  If the 
share price were to fall below $30, the warrant with cash extraction strategy 
would yield a lower loss than the underlying share because an investor cannot 
lose more than the purchase cost of the warrant (capital risk minimized).  
The cash component for this strategy would yield $3.08 after two years 
(compound interest).  The total value of the underlying investment would be 
$43.08 versus $40.00 for the non-yielding underlying share (attractive 
yield).  Finally, it is important to note that this strategy will not be 
pursued if it is not economically more attractive than underlying shares.

DEBT SECURITIES AND DOWN-GRADED INSTRUMENTS

     Each of Horizon Fund, Spectrum Fund, Mortgage Securities Fund, Bond Fund,
Enterprise Fund, Cornerstone Fund and International Fund may invest in non-
convertible debt securities rated BBB or Baa or higher by S&P or Moody's,
respectively as described in each Fund's Prospectus. Cornerstone Fund may also
invest in debt securities convertible into common stock which are rated lower
than BBB or Baa but which are rated at least B- by S&P or B3 by Moody's.  (See
the Cornerstone Fund Prospectus for information regarding these securities and
the Fund's policy regarding them.)

     The market value of debt securities generally varies in response to changes
in interest rates and the financial condition of each issuer.  During periods of
declining interest rates, the value of debt securities generally increases.
Conversely, during periods of rising interest rates, the value of such
securities generally declines.  These changes in market value will be reflected
in each Fund's net asset value.

     These Funds may, however, acquire debt securities which, after acquisition,
are down-graded by the rating agencies to a rating which, in the case of non-
convertible debt, is lower than BBB or Baa by S&P's or Moody's, respectively, or
which, in the case of convertible debt held by Cornerstone Fund, is lower than
B- or B3 by S&P or Moody's respectively.  In such an event it is such Funds'
general policy to dispose of such down-graded securities except when, in the
judgment of the Funds' investment adviser, it is to the Funds' advantage to
continue to hold such securities.  In no event, however, will any such Fund hold
more than 5% of its net assets, in the aggregate, in non-convertible securities
rated lower than BBB or Baa or, in the case of Cornerstone Fund, in convertible
securities rated lower than B- or B3.

     Low rated (i.e., below BBB) and unrated debt securities generally involve
greater volatility of price and risk of principal and income, including the
possibility of default by, or bankruptcy of, the issuers of the securities.  In
addition, the markets in which low rated and unrated debt securities are traded
are more limited than those in which higher rated securities are traded.  The
existence of limited markets for particular securities may diminish the Funds'
ability to sell the securities at fair value either to meet redemption requests
or to respond to changes in the economy or in the financial markets and could
adversely affect and cause fluctuations in the daily net asset value of the
Funds' shares.


                                      -8-
<PAGE>

       Adverse publicity and investor perceptions, whether or not based on 
fundamental analysis, may decrease the values and liquidity of low rated debt 
securities, especially in a thinly traded market.  Analysis of the 
creditworthiness of issuers of low rated debt securities may be more complex 
than for issuers of higher rated securities, and the ability of the Funds to 
achieve its investment objective may, to the extent of investment in low 
rated debt securities, be more dependent upon such creditworthiness analysis 
than would be the case if the Funds were investing in higher rated securities.

       Low rated debt securities may be more susceptible to real or perceived 
adverse economic and competitive industry conditions than investment grade 
securities.  The prices of low rated debt securities have been found to be 
less sensitive to interest rate changes than higher rated investments, but 
more sensitive to adverse economic downturns or individual corporate 
developments.  A projection of an economic downturn or of a period of rising 
interest rates, for example, could cause a decline in low rated debt 
securities prices because the advent of a recession could lessen the ability 
of a highly leveraged company to make principal and interest payments on its 
debt securities.  If the issuer of low rated debt securities defaults, the 
Funds may incur additional expenses to seek recovery.  The low rated bond 
market is relatively new, and many of the outstanding low rated bonds have 
not endured a major business recession.

INVESTMENTS IN RUSSIA

     The International Fund may invest in securities of Russian companies, which
involves risks and special considerations not typically associated with
investing in United States securities markets.  Since the breakup of the Soviet
Union at the end of 1991, Russia has experienced dramatic political and social
change.  The political system in Russia is emerging from a long history of
extensive state involvement in economic affairs.  The country is undergoing a
rapid transition from a centrally-controlled command system to a market-
oriented, democratic model.  The Fund may be affected unfavorably by political
or diplomatic developments, social instability, changes in government policies,
taxation and interest rates, currency repatriation restrictions and other
political and economic developments in the law or regulations in Russia and, in
particular, the risks of expropriation, nationalization and confiscation of
assets and changes in legislation relating to foreign ownership.
   
      The planned economy of the former Soviet Union was run with qualitatively
different objectives and assumptions from those prevalent in a market system and
Russian businesses do not have any recent history of operating within a market-
oriented economy.  In general, relative to companies operating in Western
economies, companies in Russian are characterized by a lack of: (i) management
with experience of operating in a market economy; (ii) modern technology; and,
(iii) a sufficient capital base with which to develop and expand their
operations.  It is unclear what will be the future effect on Russian companies,
if any, of Russia's continued attempts to move toward a more market-oriented
economy.  Russia's economy has experienced severe economic recession, if not
depression, since 1990 during which time the economy has been characterized by
high rates of inflation, high rates of unemployment, declining gross domestic
product, deficit government spending, and a devaluing currency.  The economic
reform program has involved major disruptions and dislocations in various
sectors of the economy, and those problems have been exacerbated by growing
liquidity problems.  Further, Russia presently receives significant financial
assistance from a number of countries through various programs.  To the extent
these programs are reduced or eliminated in the future, Russian economic
development may be adversely impacted.
    
     The Russian securities markets are substantially smaller, less liquid and
significantly more volatile than the securities markets in the United States.
In addition, there is little historical data on these securities markets because
they are of recent origin.  A substantial proportion of securities transactions
in Russia are privately negotiated outside of stock exchanges and
over-the-counter markets.  A limited number of issuers represent a
disproportionately large percentage of market capitalization and trading volume.
Although evolving rapidly, even the largest of Russia's stock exchanges are not
well developed compared to Western stock exchanges.  The actual volume of
exchange-based trading in Russia is low and active on-market trading generally
occurs only in the shares of a few private companies.  Most secondary market
trading of equity securities occurs through over-the-counter trading facilitated
by a growing number of licensed brokers.  Shares are traded on the over-the-
counter market primarily by the management of enterprises, investment funds,
short-term speculators and foreign investors.  The securities of Russian
companies are mostly traded over-the-counter and, despite the large number of
stock exchanges, there is still no organized public market for such securities.
This may increase the difficulty of valuing the Fund's investments.  No
established secondary markets may exist for many of the securities in which the
Fund may invest.  Reduced secondary market liquidity may have an adverse effect
on market price and the Fund's ability to dispose of particular instruments when
necessary to meet its liquidity requirements or in response to specific economic
events such as a deterioration in the creditworthiness of the issuer.  Reduced
secondary market liquidity for securities may also make it more difficult for
the Fund to obtain accurate market quotations for purposes of valuing its
portfolio and calculating its net asset value.  Market quotations are generally
available on many emerging country securities only from a limited number of
dealers and may not necessarily represent firm bids of those dealers or prices
for actual sales.
   
     Because of the recent formation of the securities markets as well as the
underdeveloped state of the banking and telecommunications systems, settlement,
clearing and registration transactions are subject to significant risks not
normally associated with investments in the United States and other more
developed markets.  Ownership of shares (except where shares are held through
depositories that meet the requirements of the 1940 Act) is defined according to
entries in the company's share register and normally evidenced by extracts from
the register or in certain limited cases by formal share certificates.  However,
there is not a central registration system and these services are carried out by
the companies themselves or by registrars located throughout Russia.  These
registrars are not necessarily subject to effective state supervision and its
possible for the Fund to lose its registration through fraud, negligence and
even mere oversight.  The laws and regulations in Russia affecting Western
investment business continue to evolve in an unpredictable manner.  Russian laws
and regulations, particularly those involving taxation, foreign investment and
trade, title to property or securities, and transfer of title, applicable to the
Fund's activities are relatively new and can change quickly and unpredictably in
a manner far more volatile than in the United States or other developed market
economies.  Although basic commercial laws are in place, they are often unclear
or contradictory and subject to varying interpretation, and may at any time be
amended, modified, repealed or replaced in a manner adverse to the interest of
the Fund.  There is still lacking a cohesive body of law and precedents normally
encountered in business environments.  Foreign investment in Russian companies
is, in certain cases, legally restricted.  Sometimes these restrictions are
contained in constitutional documents of an enterprise which are not publicly
available.  Russian foreign investment legislation currently guarantees the
right of foreign investors to transfer abroad income received on investments
such as profits, dividends and interest payments.  This right is subject to
settlement of all applicable taxes and duties.  However, more recent legislation
governing currency regulation and control guarantees the right to export
interest, dividends and other income on investments, but does not expressly
permit the repatriation of capital from the realization of investments.  Current
practice is to recognize the right to repatriation of capital.  Authorities
currently do not attempt to restrict repatriation beyond the extent of the
earlier law.  No guarantee can be made, however, that amounts representing
realization of capital of income will be capable of being remitted.  If, for any
reason, the Fund were unable to distribute an amount equal to substantially all
of its investment company taxable income (as defined for U.S. tax purposes)
within applicable time periods, the Fund would not qualify for the favorable
U.S. federal income tax treatment afforded to regulated investment companies,
or, even if it did so qualify, it might become liable for income and excise
taxes on undistributed income.
    
     Russian courts lack experience in commercial dispute resolution and many of
the procedural remedies for enforcement and protection of legal rights typically
found in Western jurisdictions are not available in Russia.  There remains
uncertainty as to the extent to which local parties and entities, including
Russian state authorities, will recognize the contractual and other rights of
the parties with which they deal.  Accordingly, there will be difficulty and
uncertainty in the Fund's ability to protect and enforce its rights against
Russian state and private entities.  There is also no assurance that the Russian
courts will recognize or acknowledge that the Fund has acquired title to any
property or securities in which the Fund invests, or that the Fund is the owner
of any property or security held in the name of a nominee which has acquired
such property or security on behalf of the Fund, because there is at present in
Russia no reliable system or legal framework regarding the registration of
titles.  There can be no assurance that this difficulty in protecting and
enforcing rights in Russia will not have a material adverse effect on the Fund
and its operations.  Difficulties are likely to be encountered enforcing
judgments of foreign courts within Russia or of Russian courts in foreign
jurisdictions due to the limited number of countries which have signed treaties
for mutual recognition of court judgments with Russia.

                            INVESTMENT RESTRICTIONS

       Each of the Funds is "diversified" as defined in the Investment 
Company Act of 1940.  This means that at least 75% of the value of the Fund's 
total assets is represented by cash and cash items, government securities, 
securities of other investment companies, and securities of other issuers, 
which for purposes of this calculation, are limited in respect of any one 
issuer to an amount not greater in value than 5% of the Fund's total assets 
and to not more than 10% of the outstanding voting securities of such issuer.

       Each Fund is also subject to certain "fundamental" investment 
restrictions, which may not be changed without the vote of a "majority" of 
the Fund's outstanding shares.  As used in the Prospectus and this Statement 
of Additional Information, "majority" means the lesser of (i) 67% of a Fund's 
outstanding shares present at a meeting of the holders if more than 50% of 
the outstanding shares are present in person or by proxy or (ii) more than 
50% of a Fund's outstanding shares.  An investment restriction which is not 
fundamental may be changed by vote of the Board of Directors without further 
shareholder approval.  Except as otherwise noted, each of the investment 
restrictions below is fundamental.

HORIZON FUND

       Horizon Fund will NOT:

            (1) Purchase any security (other than securities issued 
       or guaranteed by the United States Government, its agencies or 
       instrumentalities) if, as a result, more than 5% of the Fund's total 
       assets would be invested in securities of a single issuer, except 
       that up to 25% of the value of the Fund's total assets may be 
       invested without regard to this limitation; 
       [NOTE: SEE "ADDITIONAL INVESTMENT RESTRICTIONS" BELOW.]


                                      -9-
<PAGE>

            (2) Purchase any security if, as a result, more than 25% of the 
       Fund's total assets would be invested in the securities of issuers 
       conducting their principal business activities in a single industry;

            (3) Purchase securities on margin (but it may obtain such 
       short-term credits as may be necessary for the clearance of purchases 
       and sales or securities); or make short sales except short sales 
       against the box where it owns the securities sold or, by virtue of 
       ownership of other securities, it has the right to obtain, without 
       payment of further consideration, securities equivalent in kind and 
       amount to those sold;

            (4) Acquire more than 10% of any class of securities of an issuer 
       (taking all preferred stock issues of an issuer as a single class and 
       all debt issues of an issuer as a single class) or acquire more than 
       10% of the outstanding voting securities of an issuer;

            (5) Borrow money, except from banks and only as a temporary measure
       for extraordinary or emergency purposes and not in excess of 5% of 
       its net assets;

            (6) Mortgage, pledge, hypothecate, or in any manner transfer, as 
       security for indebtedness, any assets of the Fund;

            (7) Invest more than a total of 5% of its total assets in 
       securities of businesses (including predecessors) less than three 
       years old or equity securities which are not readily marketable;

            (8) Purchase or retain securities of any company if officers and 
       directors of the Fund or of its investment adviser who individually 
       own more than 1/2 of 1% of the shares or securities of that  company, 
       together own more than 5%;

            (9) Make loans, except by purchase of bonds, debentures, commercial
       paper, certificates of deposit, corporate notes and similar evidences 
       of indebtedness, which are a part of an issue to the public or to 
       financial institutions, and except loans of portfolio securities to 
       broker-dealers and financial institutions, determined by the Fund to 
       have sufficient financial responsibility, if such loans are secured 
       at all times by cash or securities issued or guaranteed by the United 
       States  Government, its agencies or instrumentalities, in an amount 
       at all times equal to at least 100% of the market value of the 
       portfolio securities loaned and if, immediately after making such 
       loan, the total amount of portfolio securities loaned does not exceed 
       20% of the market value of the Fund's total assets;

            (10) Buy or sell oil, gas or other mineral leases, rights or 
       royalty contracts, real estate or interests in real estate which are 
       not readily marketable, commodities or commodity contracts. (This 
       does not prevent the Fund from purchasing securities of companies 
       investing in the foregoing.);


                                      -10-
<PAGE>

            (11) Act as an underwriter of securities, except to the 
       extent the Fund may be deemed to be an underwriter, under the federal 
       securities laws, in connection with the disposition of portfolio 
       securities;

            (12) Make investments for the purpose of exercising control 
       or management;

            (13) Participate on a joint or joint and several basis in 
       any trading account in securities;

            (14) Write put or call options, except covered call options 
       which are traded on national securities exchanges with respect to 
       common stocks in its portfolio, in an aggregate amount not greater 
       than 15% of its net assets; or purchase options, except call options in 
       order to close out a position;

            (15) Invest in the securities of other investment companies 
       with an aggregate value in excess of 5% of the Fund's total assets, 
       except securities acquired as a result of a merger, consolidation or 
       acquisition of assets;

            (16) Purchase or sell any securities other than Fund shares 
       from or to its investment adviser or any officer or director of the 
       Fund or its investment adviser; or

            (17) Invest more than a total of 10% of the Fund's net assets in
       securities restricted as to disposition under federal securities laws 
       or otherwise or other illiquid assets (which include repurchase 
       agreements with a maturity of over seven days).

SPECTRUM FUND

       Spectrum Fund will NOT:

            (1) Purchase any security (other than securities issued or 
       guaranteed by the United States Government, its agencies or 
       instrumentalities) if, as a result, more than 5% of the Fund's total 
       assets would be invested in securities of a single issuer, except that
       up to 25% of the value of the Fund's total assets may be invested 
       without regard to this limitation;

            (2) Purchase any security if, as a result, more than 25% of 
       the Fund's total assets would be invested in the securities of issuers 
       conducting their principal business activities in a single industry, 
       provided that (a) telephone, gas and electric public utilities are each 
       regarded as separate industries and (b) banking, savings and loan 
       associations, savings banks and finance companies as a group will not 
       be considered a single industry for the purpose of this limitation. 
       There is no limitation with respect to the concentration of investments 
       in securities issued or guaranteed by the United States Government, its 
       agencies or instrumentalities or certificates of deposit and bankers' 
       acceptances of United States banks and savings and loan associations; 
       [NOTE: SEE "ADDITIONAL INVESTMENT RESTRICTIONS" BELOW.]


                                      -11-
<PAGE>

            (3) Purchase any security on margin (but it may obtain 
       such short-term credits as may be necessary for the clearance of 
       purchases and sales of securities);

            (4) Make short sales except short sales against the box 
       where it owns the securities sold or, by virtue of ownership of other 
       securities, it has the right to obtain, without payment of further 
       consideration, securities equivalent in kind and amount to those sold;

            (5) Acquire more than 10% of any class of securities of 
       an issuer (taking all preferred stock issues of an issuer as a single 
       class and all debt issues of an issuer as a single class) or acquire 
       more than 10% of the outstanding voting securities of an issuer;

            (6) Borrow money, except from banks and only as a 
       temporary measure for extraordinary or emergency purposes and not in 
       excess of 5% of its net assets; 
       [NOTE: SEE "ADDITIONAL INVESTMENT RESTRICTIONS" BELOW.]

            (7) Mortgage, pledge, hypothecate, or in any manner 
       transfer, as security for indebtedness, any assets of the Fund, 
       except that this limitation shall not apply to deposits made in 
       connection with the entering into and holding of interest rate 
       futures contracts;

            (8) Invest more than a total of 5% of its total assets in 
       securities of businesses (including predecessors) less than three 
       years old or equity securities which are not readily marketable;

            (9) Purchase or retain securities of any company if 
       officers and directors of the Fund or of its investment adviser who 
       individually own more than 1/2 of 1% of the shares of securities of 
       that  company, together own more than 5%;

            (10) Make loans, except by purchase of qualified debt 
       obligations referred to in the Prospectus and except loans of 
       portfolio securities to broker-dealers and financial institutions, 
       determined by the Fund's investment adviser to have sufficient 
       financial responsibility, if such loans are secured at all times by 
       cash or securities issued or guaranteed by the United States 
       Government, its agencies or instrumentalities, in an amount at all 
       times equal to at least 100% of the market value of the portfolio 
       securities loaned and if, immediately after making such loans, the 
       total amount of portfolio securities loaned does not exceed 20% of 
       the market value of the Fund's total assets;

            (11) Buy or sell oil, gas or other mineral leases, rights 
       or royalty contracts, real estate or interests in real estate which 
       are not readily marketable, commodities or commodity contracts. (This 
       does not prevent the Fund from purchasing securities of companies 
       investing in the foregoing.);

            (12) Act as an underwriter of securities, except to the 
       extent the Fund may be deemed to be an underwriter, under the federal 
       securities laws, in connection with the disposition of portfolio 
       securities;


                                      -12-
<PAGE>

            (13) Make investments for the purpose of exercising 
       control or management;

            (14) Participate on a joint or joint and several basis in 
       any trading account in securities;

            (15) Write call or purchase put options, except covered 
       options which are traded on national securities exchanges with 
       respect to securities in its portfolio, in an amount not greater than 
       15% of its net assets, or purchase a call option or write a put 
       option, except to close out a position;

            (16) Invest in the securities of other investment 
       companies with an aggregate value in excess of 5% of the Fund's total 
       assets, except securities acquired as a result of a merger, 
       consolidation or acquisition of assets; or

            (17) Invest more than a total of 10% of the Fund's net 
       assets in securities restricted as to disposition under federal 
       securities laws or otherwise or other illiquid assets.

MORTGAGE SECURITIES FUND

       Mortgage Securities Fund will NOT:

            (1) Purchase any security (other than securities issued 
       or guaranteed by the United States Government, its agencies or 
       instrumentalities) if, as a result, more than 5% of the Fund's total 
       assets would be invested in securities of a single issuer, except 
       that up to 25% of the value of the Fund's total assets may be 
       invested without regard to this limitation;

            (2) Purchase any security if, as a result, more than 25% 
       of the Fund's total assets would be invested in the securities of 
       issuers conducting their principal business activities in a single 
       industry, except that this limitation shall not apply to investment 
       in the mortgage and mortgage-finance industry (in which more than 
       25% of the value of the Fund's total assets will, except for 
       temporary defensive positions, be invested) or securities issued or 
       guaranteed by the United States Government, its agencies or 
       instrumentalities; 
       [NOTE: SEE "ADDITIONAL INVESTMENT RESTRICTIONS" BELOW.]

            (3) Purchase securities on margin (but it may obtain such 
       short-term credits as may be necessary for the clearance of purchases 
       and sales of securities); or make short sales except short sales 
       against the box where it owns the securities sold or, by virtue of 
       ownership of other securities, it has the right to obtain, without 
       payment of further consideration, securities equivalent in kind and 
       amount to those sold;

            (4) Lend its portfolio securities;

            (5) Borrow money except from banks and only as a 
       temporary measure for extraordinary or emergency purposes and not in 
       excess of 5% of its net assets;


                                      -13-
<PAGE>

            (6) Mortgage, pledge, hypothecate, or in any manner 
       transfer, as security for indebtedness, any assets of the Fund, 
       except that this limitation shall not apply to deposits made in 
       connection with the entering into and holding of interest rate 
       futures contracts;

            (7) Invest more than a total of 5% of its total assets in 
       securities of businesses (including predecessors) less than three 
       years old or equity securities which are not readily marketable;

            (8) Purchase or retain securities of any company if 
       officers and directors of the Fund or of its investment adviser who 
       individually own more than 1/2 of 1% of the shares or securities of 
       the  company, together own more than 5%;

            (9) Make loans, except by purchase of qualified debt 
       obligations referred to in the Prospectus under "Investment 
       Objectives and Policies;"

            (10) Buy or sell (a) oil, gas or other mineral leases, 
       rights or royalty contracts; (b) real estate, except that it may 
       invest in mortgage-related securities and whole loans and purchase 
       and sell  securities of companies which deal in real estate or 
       interests therein; or (c) commodities or commodity contracts, except 
       that it may invest in interest rate futures contracts.

            (11) Act as an underwriter of securities, except to the 
       extent the Fund may be deemed to be an underwriter, under the federal 
       securities laws, in connection with the disposition of portfolio 
       securities;

            (12) Make investments for the purpose of exercising 
       control or management;

            (13) Invest in the securities of other investment 
       companies with an aggregate value in excess of 5% of the Fund's total 
       assets, except securities acquired as a result of a merger, 
       consolidation or acquisition of assets; or

            (14) Invest more than a total of 10% of the Fund's net 
       assets in securities restricted as to disposition under federal 
       securities laws or otherwise or other illiquid assets (which include 
       put and  call options).

MONEY MARKET FUND (Restriction number 15 is not "fundamental".)

       Money Market Fund will NOT:

            (1) Purchase any security (other than securities issued 
       or guaranteed by the United States Government, its agencies or 
       instrumentalities) if, as a result, more than 5% of the Fund's total 
       assets would be invested in securities of a single issuer;

            (2) Purchase any security if, as a result, more than 25% 
       of the Fund's total assets would be invested in the securities of 
       issuers conducting their principal business activities in a single 
       industry; provided that (a) telephone, gas, and electric public 
       utilities are each


                                      -14-
<PAGE>

       regarded as separate industries and (b) United States banks, 
       savings and loan associations, savings banks and finance 
       companies are each regarded as separate industries for the 
       purpose of this limitation. There are no limitations with respect 
       to the concentration of investments in securities issued or guaranteed 
       by the United States Government, its agencies or instrumentalities, 
       or certificates of deposit and bankers acceptances of domestic 
       branches of United States banks; 
       [NOTE: SEE "ADDITIONAL INVESTMENT RESTRICTIONS" BELOW.]

            (3) Purchase securities on margin (but it may obtain such 
       short-term credits as may be necessary for the clearance of purchases 
       and sales of securities); or make short sales except short sales 
       against the box where it owns the securities sold or, by virtue of 
       ownership of other securities, it has the right to obtain, without 
       payment of further consideration, securities equivalent in kind and 
       amount to those sold, and only to the extent that the Fund's short 
       positions will not at the time of any short sale aggregate in total 
       sale prices more than 10% of its total assets;

            (4) Acquire more than 10% of any class of securities of 
       an issuer (taking all preferred stock issues of an issuer as a single 
       class and all debt issues of an issuer as a single class) or acquire 
       more than 10% of the outstanding voting securities of an issuer;

            (5) Borrow money or enter into reverse repurchase 
       agreements in excess of 5% of its net assets and, with respect to 
       borrowing money, only from banks and only as a temporary measure for 
       extraordinary or emergency purposes;

            (6) Mortgage, pledge, hypothecate, or in any manner 
       transfer, as security for indebtedness, any assets of the Fund;

            (7) Invest more than 5% of its total assets in securities 
       of businesses (including predecessors) less than three years old;

            (8) Purchase or retain securities of any company if 
       officers and directors of the Fund or of its investment adviser who 
       individually own more than 1/2 of 1% of the shares or securities of 
       that company, together own more than 5%;

            (9) Make loans, except by purchase of bonds, debentures, 
       commercial paper, corporate notes and similar evidences of 
       indebtedness, which are a part of an issue to the public or to 
       financial institutions;

            (10) Buy or sell oil, gas or other mineral leases, rights 
       or royalty contracts, real estate or interests in real estate which 
       are not readily marketable, commodities or commodity contracts. (This 
       does not prevent the Fund from purchasing securities of companies 
       investing in the foregoing.);

            (11) Act as an underwriter of securities, except to the 
       extent the Fund maybe deemed to be an underwriter in connection with 
       the disposition of portfolio securities;


                                      -15-
<PAGE>

            (12) Make investments for the purpose of exercising control or
       management;

            (13) Participate on a joint or joint and several basis in any 
       trading account in securities;

            (14) Write or purchase put or call options, or combinations thereof;

            (15) Enter into repurchase agreements maturing in more than seven 
       days, purchase certificates of deposit of banks and savings and loan 
       associations which at the date of the investment have total assets (as 
       of the date of their most recent annual financial statements) of less 
       than $2 billion, purchase variable amount master demand notes, or invest
       in any other illiquid assets, if such investments taken together exceed
       10% of the Fund's net assets (This restriction is non-fundamental.); or

            (16) Invest in the securities of other investment companies with 
       an aggregate value in excess of 5% of the Fund's total assets, except 
       securities acquired as a result of a merger, consolidation or acquisition
       of assets.

BOND FUND (Restriction number 16 is not "fundamental".)

       Bond Fund will NOT:

            (1) Purchase any security (other than securities issued or 
       guaranteed by the United States Government, its agencies or 
       instrumentalities) if, as a result, more than 5% of the Fund's total 
       assets would be invested in securities of a single issuer, except that 
       up to 25% of the value of the Fund's total assets may be invested
       without regard to this limitation;

            (2) Purchase any security if, as a result, 25% or more of the 
       Fund's total assets would be invested in the securities of issuers 
       conducting their principal business activities in a single industry, 
       provided that (a) the electric, telephone, gas, gas transmission, 
       water, telegraph and satellite communications utilities are each 
       regarded as separate industries, and (b) banks, savings and loan 
       associations, savings banks, and finance companies are each regarded 
       as separate industries. There is no limitation with respect to the 
       concentration of investments in securities issued or guaranteed by 
       the United States Government, its agencies or instrumentalities.

            (3) Purchase securities on margin (but it may obtain such 
       short-term credits as may be necessary for the clearance of purchases 
       and sales or securities); or make short sales except short sales 
       against the box where it owns the securities sold or, by virtue of 
       ownership of other securities, it has the right to obtain, without 
       payment of further consideration, securities equivalent in kind and 
       amount to those sold;

            (4) Acquire more than 10% of any class of securities of an issuer
       (taking all preferred stock issues of an issuer as a single class and 
       all debt issues of an issuer as a single class) or acquire more than 
       10% of the outstanding voting securities of an issuer;


                                      -16-
<PAGE>

            (5) Borrow money, except from banks and only as a temporary measure
       for extraordinary or emergency purposes, including the meeting of 
       redemption requests which might otherwise require the untimely 
       disposition of securities, and not in excess of 5% of its net assets;
       or enter into reverse repurchase agreements;

            (6) Mortgage, pledge, hypothecate, or in any manner transfer, as
       security for indebtedness, any assets of the Fund, except that this 
       limitation shall not apply to deposits made in connection with the 
       entering into and holding of interest rate futures contracts;

            (7) Invest more than a total of 5% of its total assets in securities
       of businesses (including predecessors) less than three years old or 
       equity securities which are not readily marketable;

            (8) Purchase or retain securities of any company if officers and 
       directors of the Fund or of its investment adviser who individually own
       more than 1/2 of 1% of the shares or securities of that company, 
       together own more than 5%;

            (9) Make loans, except by purchase of qualified debt obligations 
       referred to in the Prospectus under "Investment Objectives and 
       Policies," and except loans of portfolio securities to broker-dealers
       and financial institutions, determined by the Fund to have sufficient
       financial responsibility, if such loans are secured at all times by 
       cash or securities issued or guaranteed by the United States 
       Government, its agencies or instrumentalities, in an amount at all 
       times equal to at least 100% of the market value of the portfolio 
       securities loaned and if, immediately after making such loan, the 
       total amount of portfolio securities loaned does not exceed 20% of 
       the market value of the Fund's total assets;

            (10) Buy or sell oil, gas or other mineral leases, rights or 
       royalty contracts, real estate, or interests in real estate which are 
       not readily marketable, commodities or commodity contracts, except 
       that it may invest in interest rate futures contracts. (This does 
       not prevent the Fund from purchasing securities of companies investing
       in the foregoing.);

            (11) Act as an underwriter of securities, except to the extent
       the Fund may be deemed to be an underwriter, under the federal 
       securities laws, in connection with the disposition of portfolio 
       securities;

            (12) Make investments for the purpose of exercising control 
       or management;

            (13) Participate on a joint or joint and several basis in 
       any trading account in securities (but this does not prohibit the 
       "bunching" of orders for the sale or purchase of the Fund's portfolio 
       securities with other accounts advised by Advantus Capital to reduce 
       brokerage commissions or otherwise to achieve best overall execution);

            (14) Invest in the securities of other investment companies 
       with an aggregate value in excess of 5% of the Fund's total assets,
       except securities acquired as a result of a merger, consolidation
       or acquisition of assets; or


                                      -17-
<PAGE>

            (15) Invest more than a total of 10% of the Fund's net assets in
       securities restricted as to disposition under federal securities laws
       or otherwise or other illiquid assets (which include repurchase 
       agreements with a maturity of over seven days and OTC options for 
       which there is no secondary market); or

            (16) Invest more than 10% of its net assets in securities of 
       foreign issuers which are not U.S. dollar-denominated and publicly 
       traded in the United States (This restriction is non-fundamental.).

CORNERSTONE FUND AND ENTERPRISE FUND (The investment restrictions numbered 1 
through 7 below are fundamental. Restrictions numbered 8 through 14 are not 
fundamental and may be changed by the Funds' Boards of Directors.)

       Cornerstone Fund and Enterprise Fund will NOT:

            (1) Purchase any security if, as a result, 25% or more of the 
       Fund's total assets would be invested in the securities of issuers 
       conducting their principal business activities in a single industry;

            (2) Purchase securities on margin (but it may obtain such 
       short-term credits as may be necessary for the clearance of purchases 
       and sales or securities); or make short sales except short sales 
       against the box where it owns the securities sold or, by virtue of 
       ownership of other securities, it has the right to obtain, without 
       payment of further consideration, securities equivalent in kind and 
       amount to those sold;

            (3) Borrow money, except from banks and only as a temporary 
       measure for extraordinary or emergency purposes and not in excess of
       5% of its net assets;

            (4) Mortgage, pledge, hypothecate, or in any manner transfer, as
       security for indebtedness, any assets of the Fund; 

            (5) Make loans, except by purchase of bonds, debentures, commercial
       paper, certificates of deposit, corporate notes and similar evidences
       of indebtedness, which are a part of an issue to the public or to 
       financial institutions, and except loans of portfolio securities to
       broker-dealers and financial institutions, determined by the Fund to
       have sufficient financial responsibility, if such loans are secured
       at all times by cash or securities issued or guaranteed by the 
       United States  Government, its agencies or instrumentalities, in an
       amount at all times equal to at least 100% of the market value of the
       portfolio securities loaned and if, immediately after making such loan,
       the total amount of portfolio securities loaned does not exceed 20%
       of the market value of the Fund's total assets;

            (6) Buy or sell oil, gas or other mineral leases, rights 
       or royalty contracts, real estate, real estate limited partnership 
       interests, or interests in real estate which are not readily 
       marketable, commodities or commodity contracts. (This does not 
       prevent the Fund from purchasing securities of companies investing in 
       the foregoing.);


                                      -18-

<PAGE>

            (7) Act as an underwriter of securities, except to the extent the
       Fund may be deemed to be an underwriter, under the federal securities 
       laws, in connection with the disposition of portfolio securities;

            (8) Purchase or retain securities of any company if officers and
       directors of the Fund or of its investment adviser who individually 
       own more than 1/2 of 1% of the shares or securities of that company,
       together own more than 5%;

            (9) Make investments for the purpose of exercising control or 
       management;

            (10) Participate on a joint or joint and several basis in any 
       trading account in securities;

            (11) Write put or call options, except covered call options 
       which are traded on national securities exchanges with respect to 
       common stocks in its portfolio, in an aggregate amount not greater
       than 15% of its net assets; or purchase options, except call options
       in order to close out a position;

            (12) Invest in the securities of other investment companies 
       with an aggregate value in excess of 5% of the Funds total assets, 
       except securities acquired as a result of a merger, consolidation 
       or acquisition of assets;

            (13) Purchase or sell any securities other than Fund shares 
       from or to its investment adviser or any officer or director of the 
       Fund or its investment adviser; or

           (14) Invest more than a total of 10% of the Fund's net assets in
       securities or other assets, including repurchase agreements with a 
       maturity of over seven days, which are illiquid or securities of 
       businesses (including predecessors) less than three years old; 
       provided that investments in securities of businesses (including 
       predecessors) less than three years old will in no event exceed in 
       the aggregate more than 5% of the Fund's net assets.

INTERNATIONAL FUND (The investment restrictions numbered 1 through 7 below 
are fundamental. Restrictions numbered 8 through 15 are not fundamental and 
may be changed by the Fund's Board of Directors.)

       International Fund will NOT:

            (1) Purchase any security if, as a result, 25% or more of the 
       Fund's total assets would be invested in the securities of issuers 
       conducting their principal business activities in a single industry;

            (2) Purchase securities on margin (but it may obtain such 
       short-term credits as may be necessary for the clearance of purchases 
       and sales or securities); or make short sales except short sales 
       against the box where it owns the securities sold or, by virtue of 


                                      -19-
<PAGE>

       ownership of other securities, it has the right to obtain, without 
       payment of further consideration, securities equivalent in kind and 
       amount to those sold;

            (3) Borrow money, except from banks and only as a temporary
       measure for extraordinary or emergency purposes and not in excess 
       of 5% of its net assets;

            (4) Mortgage, pledge, hypothecate, or in any manner transfer,
       as security for indebtedness, any assets of the Fund; 

            (5) Make loans, except by purchase of bonds, debentures, 
       commercial paper, certificates of deposit, corporate notes and 
       similar evidences of indebtedness, which are a part of an issue to 
       the public or to financial institutions, and except loans of 
       portfolio securities to broker-dealers and financial institutions, 
       determined by the Fund to have sufficient financial responsibility, 
       if such loans are secured at all times by cash or securities issued 
       or guaranteed by the United States Government, its agencies or 
       instrumentalities, in an amount at all times equal to at least 100% 
       of the market value of the portfolio securities loaned and if, 
       immediately after making such loan, the total amount of portfolio 
       securities loaned does not exceed 20% of the market value of the 
       Fund's total assets;

            (6) Buy or sell oil, gas or other mineral leases, rights or 
       royalty contracts, real estate, real estate limited partnership 
       interests, or interests in real estate which are not readily 
       marketable, commodities or commodity contracts, except the Fund may 
       purchase and sell futures contracts on financial instruments and 
       indices, and options on such futures contracts. (This does not 
       prevent the Fund from purchasing securities of companies investing in 
       the foregoing.);

            (7) Act as an underwriter of securities, except to the extent 
       the Fund may be deemed to be an underwriter, under the federal 
       securities laws, in connection with the disposition of portfolio 
       securities;

            (8) Purchase or retain securities of any company if officers
       and directors of the Fund or of its investment adviser who individually
       own more than 1/2 of 1% of the shares or securities of that company,
       together own more than 5%;

            (9) Make investments for the purpose of exercising control or
       management;

            (10) Participate on a joint or joint and several basis in any 
       trading account in securities;

            (11) Write put or call options, except covered call options
       which are traded on national securities exchanges with respect to 
       common stocks in its portfolio, in an aggregate amount not greater 
       than 15% of its net assets; or purchase options, except call options
       in order to close out a position;


                                      -20-
<PAGE>

              (12)    Invest in the securities of other investment companies 
       with an aggregate value in excess of 10% of the Fund's total assets, 
       except securities acquired as a result of a merger, consolidation or 
       acquisition of assets;

              (13)    Purchase or sell any securities other than Fund shares 
       from or to its investment adviser or any officer or director of the Fund
       or its investment adviser;

              (14)    Invest more than a total of 10% of the Fund's net assets 
       in securities or other assets, including repurchase agreements with a 
       maturity of over seven days, which are illiquid or securities of 
       businesses (including predecessors) less than three years old; provided 
       that investments in securities of businesses (including predecessors) 
       less than three years old will in no event exceed in the aggregate more 
       than 5% of the Fund's net assets; or

              (15)    Invest more than 5% of its assets in warrants other than 
       warrants acquired in units or attached to other securities; provided, 
       that of such 5%, not more than 2% of the Fund's assets shall be invested
       in warrants that are not exchange listed.

ADDITIONAL INVESTMENT RESTRICTIONS

       Certain of the Funds have agreed with the staff of the Securities and 
Exchange Commission that, as a non-fundamental operating policy, the 
following additional investment restrictions, which modify certain of the 
fundamental investment restrictions described above, will be observed:

              (1)     Horizon Fund, Spectrum Fund, Mortgage Securities Fund and
       Money Market Fund will not purchase any security if, as a result, "25%
       or more" of the Fund's total assets would be invested in the securities 
       of issuers conducting their principal business activities in a single 
       industry (see investment restriction number 2 for each Fund).


              (2)     Spectrum Fund, in applying the limitation on investments 
       in securities of issuers conducting their principal business activities 
       in a single industry (see Spectrum Fund investment restriction number 2,
       as modified by additional investment restriction number 1 above), will 
       also apply such limitation to certificates of deposit and bankers' 
       acceptances of United States banks and savings and loan associations.


              (3)     Spectrum Fund shall include reverse repurchase agreements 
       as a "borrowing" for purposes of applying the Fund's 5% of net assets 
       limitation on borrowing money (see Spectrum Fund investment restriction 
       number 6).

ALL FUNDS


       With respect to each of the Funds, any investment policy set forth 
under "Investment Objectives, Policies and Risks" in the Prospectus, or any 
restriction set forth above which involves a maximum percentage of securities 
or assets shall not be considered to be violated unless an


                                   -21-
<PAGE>

excess over the percentage occurs immediately after an acquisition of 
securities or utilization of assets and results therefrom, or unless the 
Investment Company Act of 1940 provides otherwise.

                               PORTFOLIO TURNOVER

Portfolio turnover is the ratio of the lesser of annual purchases or sales of
portfolio securities to the average monthly value of portfolio securities, not
including short-term securities.  A 100% portfolio turnover rate would occur,
for example, if the lesser of the value of purchases or sales of portfolio
securities for a particular year were equal to the average monthly value of the
portfolio securities owned during such year.

Horizon Fund makes changes in its portfolio securities which are considered
advisable in light of market conditions.  Frequent changes may result in higher
brokerage and other costs for the Fund.  For the fiscal years ended September
30, 1996 and 1995, and the fiscal period ended September 30, 1994, the Fund's
portfolio turnover rates were 84.7%, 46.8% and 43.5%, respectively.
   
Spectrum Fund's objective and policies may cause the annual portfolio turnover
rate to be higher than the average turnover rate of other investment companies.
Accordingly, the Fund may have high brokerage and other costs.  A portfolio
turnover rate that exceeds 100% is considered high and will result in higher
costs.  For the fiscal years ended September 30, 1996 and 1995, and the fiscal
period ended September 30, 1994, the Fund's portfolio turnover rates were
140.5%, 125.5%  and 124.5%, respectively.
    
   
Mortgage Securities Fund's investment activities may result in the Fund's 
engaging in a considerable amount of trading of securities held for less than 
one year.  Accordingly, it can be expected that the Fund will have a higher 
turnover rate, and thus a higher incidence of brokerage and other costs, than 
might be expected from investment companies which invest substantially all of 
their funds on a long-term basis.  A portfolio turnover rate that exceeds 
100% is considered high and will result in higher costs.  For the fiscal 
years ended September 30, 1996 and 1995, and the fiscal period ended 
September 30, 1994, the Fund's portfolio turnover rates were 125.2%, 203.7%  
and 236.2% respectively.
    
Money Market Fund, consistent with its investment objective, attempts to
maximize yield through portfolio trading.  This may involve selling portfolio
instruments and purchasing different instruments to take advantage of
disparities of yields in different segments of the high grade money market or
among particular instruments within the same segment of the market.  As a
result, the Fund may have significant portfolio turnover.  There usually are no
brokerage commissions paid by the Fund for such purchases since such securities
are purchased on a net basis.  Since securities with maturities of less than one
year are excluded from required portfolio turnover rate calculations, the Fund's
portfolio turnover rate for reporting purposes is zero.
   
Bond Fund makes changes in its portfolio securities which are considered 
advisable in light of market conditions.  Portfolio turnover rates may vary 
greatly from year to year and within a particular year and may also be 
affected by cash requirements for redemptions of Fund shares.  Rate of 
portfolio turnover is not a limiting factor, however, and particular holdings 
may be sold at any time, if, in the opinion of the Fund's investment adviser, 
such a sale is advisable.  A portfolio turnover rate that exceeds 100% is 
considered high and will result in higher costs.  For the fiscal years ended 
September 30, 1996 and 1995, and the fiscal period ended September 30, 1994 
the Fund's portfolio turnover rates were 222.6%, 270.7% and 163.5%, 
respectively.  The substantial rate of portfolio turnover for the years ended 
September 30, 1996 and 1995 was attributable to the fact that the Fund took 
advantage of opportunities created in the corporate bond market as a result 
of tightening spreads between corporate bonds and U.S. Treasury bonds.  The 
Fund was able to buy corporate bonds at very attractive prices when the 
spreads were wide and sell those bonds at appreciated values when the spreads 
narrowed.
    
Cornerstone Fund and Enterprise Fund each make changes in their portfolio
securities which are considered advisable in light of market conditions.
Frequent changes may result in higher brokerage and other costs for the Funds.
Portfolio turnover rates may vary greatly from year to year and within a
particular year and may also be affected by cash requirements for redemptions of
Fund shares.  Neither Fund emphasizes short-term trading profits.  For the
fiscal years ended September 30, 1996 and 1995 and the fiscal period ended
September 30, 1994, Cornerstone Fund's portfolio turnover rate was 128.0%,
160.1%  and 8.1%, respectively.  For the fiscal years ended September 30, 1996
and 1995 and the fiscal period ended September 30, 1994, Enterprise Fund's
portfolio turnover rate was 80.2%, 48.8% and 5.0%, respectively.  The apparent
increase in portfolio turnover rates from 1994 to 1995 is attributable to the
fact that the figures for 1994 represent only the 14 days from the Fund's date
of inception to the end of the fiscal period.

International Fund also makes changes in its portfolio securities which are
considered advisable in light of market conditions.  The Fund does not emphasize
short-term trading profits.  For the fiscal years ended September 30, 1996 and
1995 and the fiscal period ended September 30, 1994, International Fund's
portfolio turnover rate was 56.1%, 52.0% and 12.1%, respectively.  The apparent
increase in portfolio turnover rates from 1994 to 1995 is attributable to the
fact that the figures for 1994 represent only the 14 days from the Fund's date
of inception to the end of the fiscal period.


                                       -22-
<PAGE>

                    DIRECTORS AND EXECUTIVE OFFICERS

       The names, addresses, principal occupations, and other affiliations of 
directors and executive officers of each of the Funds are given below:


<TABLE>
<CAPTION>

                              Position with    Principal Occupation and Other
Name and Address                the Funds        Affiliations (Past 5 Years)
- ----------------              -------------    ------------------------------
<S>                           <C>              <C>
Paul H. Gooding*              President        Vice President and Treasurer of
Advantus Capital              and Director     Minnesota Mutual; President and 
 Management, Inc.                              Director of Advantus Capital; 
400 Robert Street North                        President, Treasurer and Director
St. Paul, Minnesota 55101                      of MIMLIC Management

Frederick P. Feuerherm*       Treasurer        Second Vice President of Minnesota
The Minnesota Mutual          and Director     Mutual; Vice President and Assistant
 Life Insurance Company                        Secretary of MIMLIC Management
400 Robert Street North
St. Paul, Minnesota 55101

Ralph D. Ebbott               Director         Retired, Vice President and Treasurer
409 Birchwood Avenue                           of Minnesota Mining and Manufacturing
White Bear Lake,                               Company (tape, adhesive, photographic,
 Minnesota 55110                               and electrical products) through June
                                               1989

</TABLE>


                                      -23-
<PAGE>

<TABLE>
<CAPTION>

<S>                           <C>              <C>
Charles E. Arner              Director         Retired, Vice Chairman of The First 
E-1218 First National                          National Bank of Saint Paul from
 Bank Building                                 November 1983 through June 1984;
332 Minnesota Street                           Chairman and Chief Executive Officer
St. Paul, Minnesota 55101                      of The First National Bank of Saint 
                                               Paul from October 1980 through 
                                               November 1983

Ellen S. Berscheid            Director         Regents' Professor of Psychology at
University of Minnesota                        the University of Minnesota
N309 Elliott Hall
Minneapolis, Minnesota 55455

Michael J. Radmer             Secretary        Partner with the law firm of
Dorsey & Whitney LLP                           Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402

</TABLE>

_________________________

* Denotes directors of the Funds who are "interested persons" (as defined under
the Investment Company Act of 1940) of the Funds.
   
    Legal fees and expenses are paid to the law firm of which Michael J. 
Radmer is a partner.  No compensation is paid by any of the Advantus Funds to 
any of its officers or directors who is affiliated with Advantus Capital or 
MIMLIC Management.  Each director of the Funds who is not affiliated with 
Advantus Capital or MIMLIC Management is also a director of the other four
investment companies of which Advantus Capital or MIMLIC Management is the 
investment adviser (12 investment companies in total -- the "Fund Complex").  
Such directors receive compensation in connection with all such investment 
companies which, in the aggregate, is equal to $6,000 per year and $1,500 per 
meeting attended (and reimbursement of travel expenses to attend directors' 
meetings). The portion of such compensation borne by any Fund is a PRO RATA 
portion based on the ratio that such Fund's total net assets bears to the 
total net assets of the Fund Complex. During the fiscal year ended September 
30, 1996, each Director not affiliated with Advantus Capital or MIMLIC 
Management  was compensated by the funds in accordance with the following 
table:
    

                                          -24-
<PAGE>
   
                                                                     Total
                                    Pension or                    Compensation
                                    Retirement                     From Funds
                      Aggregate      Benefits       Estimated       and Fund
                     Compensation   Accrued as       Annual          Complex
                       from the    Part of Fund   Benefits Upon     Paid to
Name of Director       Funds(1)      Expenses      Retirement      Directors
- ----------------       --------      --------      ----------      ---------

Charles E. Arner      $1,557.66        n/a            n/a           $9,000
Ellen S. Berscheid    $1,557.66        n/a            n/a           $9,000
Ralph D. Ebbott       $1,557.66        n/a            n/a           $9,000
    
   
(1)  During the fiscal year ended September 30, 1996, each Director not
     affiliated with Advantus Capital or MIMLIC Management received $203.24 from
     Horizon Fund, $318.45 from Spectrum Fund, $140.77 from Mortgage Securities
     Fund, $213.48 from Money Market Fund, $98.29 from Bond Fund, $190.88 from
     Enterprise Fund, $203.73 from Cornerstone Fund and $188.82 from
     International Fund.
    
   
As of September 30, 1996, the directors and executive officers of the Funds 
did not own any shares of the Funds, except for Frederick P. Feuerherm who 
owned less than 1% of the outstanding shares of Spectrum Fund, Paul H. 
Gooding who owned less than 1% of the outstanding shares of each of Horizon 
Fund, Money Market and Bond Fund, and Michael J. Radmer who owned less than 
1% of the outstanding shares of Horizon Fund, and Spectrum Fund.
    
                           DIRECTOR LIABILITY

       Under Minnesota law, the Board of Directors of each Fund owes certain 
fiduciary duties to the Fund and to its shareholders.  Minnesota law provides 
that a director "shall discharge the duties of the position of director in 
good faith, in a manner the director reasonably believes to be in the best 
interest of the corporation, and with the care an ordinarily prudent person 
in a like position would exercise under similar circumstances."  Fiduciary 
duties of a director of a Minnesota corporation include, therefore, both a 
duty of "loyalty" (to act in good faith and act in a manner reasonably 
believed to be in the best interests of the corporation) and a duty of "care" 
(to act with the care an ordinarily prudent person in a like position would 
exercise under similar circumstances).  Minnesota law also authorizes 
corporations to eliminate or limit the personal liability of a director to 
the corporation or its shareholders for monetary damages for breach of the 
fiduciary duty of "care."  Minnesota law does not, however, permit a 
corporation to eliminate or limit the liability of a director (i) for any 
breach of the directors' duty of "loyalty" to the corporation or its 
shareholders, (ii) for acts or omissions not in good faith or that involve 
intentional misconduct or a knowing violation of law, (iii) for authorizing a 
dividend, stock repurchase or redemption or other distribution in violation 
of Minnesota law or for violation of certain provisions of Minnesota 
securities laws, or (iv) for any transaction from which the director derived 
an improper personal benefit.  The Articles of Incorporation of each Fund 
limit the liability of directors to the fullest extent permitted by Minnesota 
statutes, except to the extent that such liability cannot be limited as 
provided in the Investment Company Act of 1940 (which Act prohibits any 
provisions which purport to limit the liability of directors arising from 
such directors' willful misfeasance, bad faith, gross negligence or reckless 
disregard of the duties involved in the conduct of their role as directors).

       Minnesota law does not eliminate the duty of "care" imposed upon a 
director.  It only authorizes a corporation to eliminate monetary liability 
for violations of that duty.  Minnesota


                                        -25-
<PAGE>

law, further, does not permit elimination or limitation of liability of 
"officers" to the corporation for breach of their duties as officers 
(including the liability of directors who serve as officers for breach of 
their duties as officers). Minnesota law does not permit elimination or 
limitation of the availability of equitable relief, such as injunctive or 
rescissionary relief.  Further, Minnesota law does not permit elimination or 
limitation of a director's liability under the Securities Act of 1933 or the 
Securities Exchange Act of 1934, and it is uncertain whether and to what 
extent the elimination of monetary liability would extend to violations of 
duties imposed on directors by the Investment Company Act of 1940 and the 
rules and regulations adopted under such Act.

                      INVESTMENT ADVISORY AND OTHER SERVICES

GENERAL

       Advantus Capital Management, Inc. ("Advantus Capital") has been the 
investment adviser and manager of each of the Funds since March 1, 1995.  
Prior to that date the Funds' investment adviser was MIMLIC Asset Management 
Company ("MIMLIC Management").  Advantus Capital is a wholly-owned subsidiary 
of MIMLIC Management.  The same portfolio managers and other personnel who 
previously provided investment advisory services to the Funds through MIMLIC 
Management continue to provide the same services through Advantus Capital.  
MIMLIC Sales acts as the Funds' underwriter.  Both Advantus Capital and 
MIMLIC Sales act as such pursuant to written agreements that will be 
periodically considered for approval by the directors or shareholders of the 
Fund.  The address of both Advantus Capital and MIMLIC Sales is 400 Robert 
Street North, St. Paul, Minnesota 55101.

CONTROL AND MANAGEMENT OF ADVANTUS CAPITAL AND MIMLIC SALES

       Advantus Capital was incorporated in Minnesota in June, 1994, and is a 
wholly-owned subsidiary of MIMLIC Management. MIMLIC Management is a 
subsidiary of The Minnesota Mutual Life Insurance Company ("Minnesota 
Mutual"), which was organized in 1880, and has assets of more than $9.8 
billion. MIMLIC Sales is also a subsidiary of MIMLIC Management. Paul H. 
Gooding, President and a Director of each of the Funds, is President and 
director of Advantus Capital, and President, Treasurer, and a Director of 
MIMLIC Management. Frederick P. Feuerherm, Treasurer and a Director of each 
of the Funds, is a Vice President and Assistant Secretary of MIMLIC 
Management. James P. Tatera, Senior Vice President and Director of Advantus 
Capital, is also Vice President of MIMLIC Management.

INVESTMENT ADVISORY AGREEMENT

       Advantus Capital acts as investment adviser and manager of the Funds 
under Investment Advisory Agreements (the "Advisory Agreements") dated March 
1, 1995 for each Fund, each of which Advisory Agreements was approved by 
shareholders on February 14, 1995.  The Advisory Agreements were last 
approved by the Board of Directors of each Fund (including a majority of the 
directors who are not parties to the contract, or interested persons of any 
such party) on January 14, 1997.  The Advisory Agreements will terminate 
automatically in the event of their


                                     -26-
<PAGE>

assignment.  In addition, each Advisory Agreement is terminable at any time, 
without penalty, by the Board of Directors of the respective Fund or by vote 
of a majority of the Fund's outstanding voting securities on not more than 60 
days' written notice to Advantus Capital, and by Advantus Capital on 60 days' 
written notice to the Fund.  Unless sooner terminated, each Advisory 
Agreement shall continue in effect for more than two years after its 
execution only so long as such continuance is specifically approved at least 
annually by either the Board of Directors of the respective Fund or by a vote 
of a majority of the outstanding voting securities, provided that in either 
event such continuance is also approved by the vote of a majority of the 
directors who are not parties to the Advisory Agreement, or interested 
persons of such parties, cast in person at a meeting called for the purpose 
of voting on such approval.

       Pursuant to the Advisory Agreements each Fund pays Advantus Capital an 
advisory fee equal on an annual basis to a percentage of that Fund's average 
daily net assets as set forth in the following table:

                                                      Advisory Fee as Percentage
                       Fund                              of Average Net Assets
                       ----                           --------------------------

       Horizon Fund                                              .80%
       Spectrum Fund                                             .60%
       Mortgage Securities Fund                                  .575%
       Money Market Fund                                         .50%
       Bond Fund                                                 .70%
       Cornerstone Fund                                          .80%
       Enterprise Fund                                           .80%
       International Fund:
              On the first $25 million in assets                 .95%
              On the next $25 million in assets                  .80%
              On the next $50 million in assets                  .75%
              On all assets in excess of $100 million            .65%

       From the advisory fee received from International Fund, Advantus 
Capital pays Templeton Investment Counsel, Inc. a sub-advisory fee equal to 
 .70% on the first $25 million of International Fund's average daily net 
assets, .55% on the next $25 million, .50% on the next $50 million, and .40% 
on all average daily net assets in excess of $100 million.


       Prior to March 1, 1995, the fees paid by the Funds for investment 
advisory services were paid to MIMLIC Management rather than to Advantus 
Capital. MIMLIC Management was compensated at the same rate as is Advantus 
Capital under the current Advisory Agreements. The fees paid by the Funds 
during the fiscal years ended September 30, 1996 and 1995, and the fiscal 
period ended September 30, 1994 (before Advantus Capital's or MIMLIC 
Management's absorption of certain expenses, described below) were as follows:


                                       -27-
<PAGE>

         Fund                               1996           1995           1994
         ---                                ----           ----           ----

     Horizon Fund                         $319,371       $276,972       $222,869
     Spectrum Fund                         370,684        338,669        404,391
     Mortgage Securities Fund              154,423        155,798        144,561
     Money Market Fund                     198,141        148,238        110,595
     Bond Fund                             130,555        104,228         90,854
     Cornerstone Fund                      330,954        150,365         18,833
     Enterprise Fund                       302,906        167,883         19,519
     International Fund                    327,858        241,970         29,922

    For this fee, Advantus Capital acts as investment adviser and manager for 
the Funds, and, except for Money Market Fund, pays the Funds' transfer agent, 
dividend disbursing agent and redemption agent expenses.  Money Market Fund 
pays its own transfer agent, dividend disbursing agent, and redemption agent 
expenses.  All of the Funds have engaged Minnesota Mutual to act as their 
transfer agent, dividend disbursing agent, and redemption agent.  While the 
advisory fees paid by Horizon Fund, Cornerstone Fund, Enterprise Fund and 
International Fund are higher than those paid by most mutual funds, they are 
partially offset by Advantus Capital's payment of certain expenses, such as 
the transfer agent, dividend disbursing agent and redemption agent expenses, 
which expenses are not customarily paid for by a mutual fund's investment 
adviser. During the fiscal year ended September 30, 1996, Money Market Fund 
paid Minnesota Mutual $112,299 for transfer agent services.  In addition, 
separate from the investment advisory agreement, each of the Funds has 
entered into an agreement with Minnesota Mutual under which Minnesota Mutual 
provides accounting, legal and other administrative services to the Funds.  
Minnesota Mutual currently provides such services to the Funds at a monthly 
cost of $3,600 for Horizon Fund, Spectrum Fund, Mortgage Securities Fund, 
Bond Fund, Enterprise Fund, Cornerstone Fund, $3,000 for Money Market Fund, 
and $2,500 for International Fund.  During the fiscal year ended September 
30, 1996, each of the Funds paid Minnesota Mutual the following amounts for 
such services:

                   Fund                               Amount
                   ----                               ------

     Horizon Fund                                    $41,200
     Spectrum Fund                                    41,200
     Mortgage Securities Fund                         41,200
     Money Market Fund                                34,000
     Bond Fund                                        41,200
     Cornerstone Fund                                 41,200
     Enterprise Fund                                  41,200
     International Fund                               28,200

    Under the Advisory Agreements, Advantus Capital furnishes the Funds 
office space and all necessary office facilities, equipment and personnel for 
servicing the investments of the Funds, and pays the salaries and fees of all 
officers and directors of the Funds who are affiliated with Advantus Capital. 
 In addition, except to the extent that MIMLIC Sales receives Rule 12b-1 
distribution fees (see "Payment of Certain Distribution Expenses of the 
Funds" below), MIMLIC Sales bears all promotional expenses in connection with 
the distribution of the Funds' shares, including paying for prospectuses and 
statements of additional information for new shareholders, and shareholder 
reports for new shareholders, and the costs of sales literature.  The Funds 
pay all other expenses not so expressly assumed.


                                    -28-
<PAGE>

    During the fiscal years ended September 30, 1996 and 1995, and the fiscal 
period ended September 30, 1994 Advantus Capital or MIMLIC Management (which 
was formerly the Funds' investment adviser) voluntarily absorbed certain 
expenses of the Funds (which do not include certain Rule 12b-1 fees waived by 
MIMLIC Sales) as set forth below:

         Fund                               1996         1995         1994
         ---                                ----         ----         ----

     Horizon Fund                           $  -0-     $  2,814     $    -0-
     Spectrum Fund                             -0-          -0-          -0-
     Mortgage Securities Fund               20,025        9,655          -0-
     Money Market Fund                     142,522      151,288      156,505
     Bond Fund                              88,798      100,487       82,132
     Cornerstone Fund                          -0-       47,635        8,493
     Enterprise Fund                           -0-       43,566        8,124
     International Fund                        -0-       17,626        3,015

INTERNATIONAL FUND SUB-ADVISER -- TEMPLETON COUNSEL

       Templeton Investment Counsel, Inc., (hereinafter "Templeton Counsel"), 
a Florida corporation with principal offices at 500 East Broward Boulevard, 
Fort Lauderdale, Florida 33394 has been retained under an investment 
sub-advisory agreement to provide investment advice and, in general, to 
conduct the management investment program of the International Fund, subject 
to the general control of the Board of Directors of the Fund.  Templeton 
Counsel is an indirect, wholly-owned subsidiary of Templeton Worldwide, Inc., 
Fort Lauderdale, Florida, which in turn is a wholly-owned subsidiary of 
Franklin Resources, Inc. ("Franklin").

       Franklin is a large, diversified financial services organization.  
Through its operating subsidiaries, Franklin provides a variety of investment 
products and services to institutions and


                                       -29-
<PAGE>

individuals throughout the United States and abroad.  One of the 
country's largest mutual fund organizations, Franklin's business includes the 
provision of management, administrative and distribution services to the 
Franklin/Templeton Group of Funds, which is distributed through a nationwide 
network of banks, broker-dealers, financial planners and investment advisers. 
Franklin is headquartered in San Mateo, California, and its common stock is 
listed on the New York Stock Exchange under the ticker symbol BEN.

       Certain clients of Templeton Counsel may have investment objectives 
and policies similar to that of the International Fund.  Templeton Counsel 
may, from time to time make recommendations which result in the purchase or 
sale of a particular security by its other clients simultaneously with Fund.  
If transactions on behalf of more than one client during the same period 
increase the demand for securities being purchased or the supply of 
securities being sold, there may be an adverse effect on price.  It is the 
policy of Templeton Counsel to allocate advisory recommendations and the 
placing of orders in a manner which is deemed equitable by Templeton Counsel 
to the accounts involved, including the International Fund.  When two or more 
of the clients of Templeton Counsel (including the International Fund) are 
purchasing the same security on a given day from the same broker-dealer, such 
transactions may be averaged as to price.

INTERNATIONAL FUND INVESTMENT SUB-ADVISORY AGREEMENT -- TEMPLETON COUNSEL

       Templeton Counsel acts as an investment sub-adviser to the 
International Fund under an Investment Sub-Advisory Agreement (the "Templeton 
Agreement") with Advantus Capital dated March 1, 1995, and approved by 
shareholders of the Fund on February 14, 1995.  The Templeton Agreement was 
last approved for continuance by the Board of Directors of the Fund, 
including a majority of the Directors who are not a party to the Templeton 
Agreement or interested persons of any such party, on January 14, 1997.  The 
Templeton Agreement will terminate automatically upon the termination of the 
Advisory Agreement and in the event of its assignment.  In addition, the 
Templeton Agreement is terminable at any time, without penalty, by the Board 
of Directors of the Fund, by Advantus Capital or by a vote of the majority of 
the International Fund's outstanding voting securities on 60 days' written 
notice to Templeton Counsel and by Templeton Counsel on 60 days' written 
notice to Advantus Capital.  Unless sooner terminated, the Templeton 
Agreement shall continue in effect from year to year if approved at least 
annually by the Board of Directors of the Fund or by a vote of a majority of 
the outstanding voting securities of the International Fund, provided that in 
either event such continuance is also approved by the vote of a majority of 
the directors who are not interested persons of any party to the Templeton 
Agreement, cast in person at a meeting called for the purpose of voting on 
such approval.

DISTRIBUTION AGREEMENT
   
     The Board of Directors of each Fund, on January 14, 1997, including a
majority of the directors who are not parties to the contract, or interested
persons of any such party, last approved the respective Fund's Distribution
Agreement with MIMLIC Sales (the "Distribution Agreements"), each dated March 1,
1995, except in the case of International Fund, whose Distribution Agreement is
dated January 31, 1997.  During the fiscal years ended September 30, 1996 and
1995, and the fiscal period ended September 30, 1994 the commissions received by
MIMLIC Sales under the Distribution Agreements, except in the case of Money
Market Fund (which does not provide for MIMLIC Sales to receive a commission),
with respect to shares of all classes under the Distribution Agreements were as
follow:
    

                                   -30-
<PAGE>
   
         Fund                               1996           1995           1994

     Horizon Fund                         $247,322       $125,141       $150,713
     Spectrum Fund                         354,051        226,547        341,528
     Mortgage Securities Fund              101,891         97,402        182,209
     Bond Fund                             137,919         61,826        103,025
     Cornerstone Fund                      271,957         62,839            276
     Enterprise Fund                       163,228         57,059            -0-
     International Fund                    158,726        150,769            -0-
    
During the same periods MIMLIC Sales retained from these commissions the
following amounts:

         Fund                               1996           1995           1994

     Horizon Fund                          $40,283        $14,640        $17,868
     Spectrum Fund                          27,761         27,391         41,001
     Mortgage Securities Fund               13,435          5,436          6,096
     Bond Fund                              13,413          5,966          6,546
     Cornerstone Fund                       21,374          5,200             28
     Enterprise Fund                        15,980          6,201            n/a
     International Fund                     24,740         16,080            n/a

The remainder of these commissions was paid to registered representatives of 
MIMLIC Sales or to broker-dealers who have selling agreements with MIMLIC 
Sales.

       Each Distribution Agreement may be terminated by the respective Fund 
or MIMLIC Sales at any time by the giving of 60 days' written notice, and 
terminates automatically in the event of its assignment.  Unless sooner 
terminated, the Distribution Agreement for the respective Fund shall continue 
in effect for more than two years after its execution only so long as such 
continuance is specifically approved at least annually by either the Board of 
Directors of the Fund or by a vote of a majority of the outstanding voting 
securities, provided that in either event such continuance is also approved 
by the vote of a majority of the directors who are not parties to the 
Distribution Agreement, or interested persons of such parties, cast in person 
at a meeting called for the purpose of voting on such approval.

       The Distribution Agreements require MIMLIC Sales to pay all 
advertising and promotional expenses in connection with the distribution of 
the Funds' shares including paying for Prospectuses and Statements of 
Additional Information (if any) for new shareholders, shareholder reports for 
new shareholders, and the costs of sales literature.

       In the Distribution Agreements, MIMLIC Sales undertakes to indemnify 
the Funds against all costs of litigation and other legal proceedings, and 
against any liability incurred by or imposed upon the Funds in any way 
arising out of or in connection with the sale or distribution of the


                                    -31-
<PAGE>

Funds' shares, except to the extent that such liability is the result of 
information which was obtainable by MIMLIC Sales only from persons affiliated 
with the Funds but not with MIMLIC Sales.

PAYMENT OF CERTAIN DISTRIBUTION EXPENSES OF THE FUNDS

       Money Market Fund has adopted a Plan of Distribution, and each of the 
other Funds has adopted separate Plans of Distribution applicable to Class A 
shares, Class B shares and Class C shares, respectively, relating to the 
payment of certain distribution expenses pursuant to Rule 12b-1 under the 
Investment Company Act of 1940.  Money Market Fund, pursuant to its Plan of 
Distribution, pays a fee to MIMLIC Sales which, on an annual basis, is equal 
to .30% of the Fund's average daily net assets, and is to be used to pay 
certain expenses incurred in the distribution and promotion of its shares.  
Each of the other Funds, pursuant to its Plans of Distribution, also pays 
fees to MIMLIC Sales which equal, on an annual basis, a percentage of the 
Fund's average daily net assets attributable to Class A shares, Class B 
shares and Class C shares, respectively, as set forth in the following table:

<TABLE>
<CAPTION>
                                                   Rule 12b-1 Fee as Percentage
                                           of Average Daily Net Assets Attributable to
                                           -------------------------------------------

Fund                                    Class A Shares    Class B Shares    Class C Shares
- ----                                    --------------    --------------    --------------
<S>                                     <C>               <C>               <C>
Horizon Fund                                 .30%             1.00%              1.00%
Spectrum Fund                                .35%             1.00%              1.00%
Mortgage Securities Fund                     .30%             1.00%              1.00%
Bond Fund                                    .30%             1.00%              1.00%
Cornerstone Fund                             .30%             1.00%              1.00%
Enterprise Fund                              .30%             1.00%              1.00%
International Fund                           .30%             1.00%              1.00%

</TABLE>

Such fees are also used for distribution-related services for all threee 
classes and for servicing of shareholder accounts in connection with Class B 
and C shares.

       All of the Rule 12b-1 fees payable by Money Market Fund and all of the 
Rule 12b-1 fees payable by the Advantus Load Funds and attributable to Class 
A shares of such Funds, and a portion of the Rule 12b-1 fees payable with 
respect to Class B and Class C shares equal to .75% of the average daily net 
assets attributable to such Class B and Class C shares, constitute 
distribution fees designed to compensate MIMLIC Sales for advertising, 
marketing and distributing the shares of Money Market Fund and the Advantus 
Load Funds.  

       The distribution fees may be used by MIMLIC Sales for the purpose of 
financing any activity which is primarily intended to result in the sale of 
shares of the particular Fund.  For example, such distribution fee may be 
used by MIMLIC Sales:  (a) to compensate broker-dealers, including MIMLIC 
Sales and its registered representatives, for their sale of a Fund's shares, 
including the implementation of the programs described below with respect to 
broker-dealers, banks, and other financial institutions; and (b) to pay other 
advertising and promotional expenses in connection with the distribution of a 
Fund's shares.  These advertising and promotional


                                     -32-
<PAGE>

expenses include, by way of example but not by way of limitation, costs of 
prospectuses for other than current shareholders; preparation and 
distribution of sales literature; advertising of any type; expenses of branch 
offices provided jointly by MIMLIC Sales and any affiliate thereof; and 
compensation paid to and expenses incurred by officers, employees or 
representatives of MIMLIC Sales or of other broker-dealers, banks, or 
financial institutions.

       A portion of the Rule 12b-1 fee payable with respect to Class B and 
Class C shares of each of the Advantus Load Funds, equal to .25% of the 
average daily net assets attributable to such Class B and Class C shares, 
constitutes a shareholder servicing fee designed to compensate MIMLIC Sales 
for the provision of certain services to the holders of Class B and Class C 
shares.  

       Amounts expended by the Funds under the Plans are expected to be used 
for the implementation by MIMLIC Sales of a dealer incentive program.  
Pursuant to the program, MIMLIC Sales may provide compensation to investment 
dealers for the provision of distribution assistance in connection with the 
sale of the Funds' shares to such dealers' customers and for the provision of 
administrative support services to customers who directly or beneficially own 
shares of the Funds.  The distribution assistance and administrative support 
services rendered by dealers may include, but are not limited to, the 
following:  distributing sales literature; answering routine customer 
inquiries concerning the Funds; assisting customers in changing dividend 
options, account designation and addresses, and in enrolling into the 
pre-authorized check plan or systematic withdrawal plan; assisting in the 
establishment and maintenance of customer accounts and records and in the 
processing of purchase and redemption transactions; investing dividends and 
any capital gains distributions automatically in the Funds' shares and 
providing such other information and services as the Funds or the customer 
may reasonably request.  Such fees for servicing customer accounts would be 
in addition to the portion of the sales charge received or to be received by 
dealers which sell shares of the Funds.

       MIMLIC Sales may also provide compensation to certain institutions 
such as banks ("Service Organizations") which have purchased shares of the 
Funds for the accounts of their clients, or which have made the Funds' shares 
available for purchase by their clients, and/or which provide continuing 
service to such clients.  The Glass-Steagall Act and other applicable laws, 
among other things, prohibit certain banks from engaging in the business of 
underwriting securities.  In such circumstances, MIMLIC Sales, if so 
requested, will engage such banks as Service Organizations only to perform 
administrative and shareholder servicing functions, but at the same fees and 
other terms applicable to dealers.  State law may, however, differ from the 
interpretation of the Glass-Steagall Act expressed and banks and other 
financial institutions may therefore be required to register as securities 
dealers pursuant to state law.  If a bank were prohibited from acting as a 
Service Organization, its shareholder clients would be permitted to remain 
shareholders of the Funds and alternative means for continuing servicing of 
such shareholders would be sought.  In such event changes in the operation of 
the Funds might occur and a shareholder serviced by such bank might no longer 
be able to avail itself of any automatic investment or other services then 
being provided by the bank.  It is not expected that shareholders would 
suffer any adverse financial consequences as a result of any of these 
occurrences.

       In addition, the Plan contains, among other things, provisions 
complying with the requirements of Rule 12b-1 discussed below.  Rule 12b-1(b) 
provides that any payments made by


                                     -33-
<PAGE>

an investment company in connection with the distribution of its shares may 
only be made pursuant to a written plan describing all material aspects of 
the proposed financing of distribution and also requires that all agreements 
with any person relating to implementation of the plan must be in writing.  
In addition, Rule 12b-1(b)(2) requires that such plan, together with any 
related agreements, be approved by a vote of the board of directors and of 
the directors who are not interested persons of the investment company and 
have no direct or indirect financial interest in the operation of the plan or 
in any agreements related to the plan, cast in person at a meeting called for 
the purpose of voting on such plan or agreements.  Rule 12b-1(b)(3) requires 
that the plan or agreement provide, in substance:  (1) that it shall continue 
in effect for a period of more than one year from the date of its execution 
or adoption only so long as such continuance is specifically approved at 
least annually in the manner described in paragraph (b)(2) of Rule 12b-1; (2) 
that any person authorized to direct the disposition of monies paid or 
payable by the investment company pursuant to the plan or any related 
agreement shall provide to the investment company's board of directors, and 
the directors shall review, at least quarterly, a written report of the 
amounts so expended and the purposes for which such expenditures were made; 
and (3) in the case of a plan, that it may be terminated at any time by vote 
of a majority of the members of the board of directors of the investment 
company who are not interested persons of the investment company and have no 
direct or indirect financial interest in the operation of the plan or in any 
agreements related to the plan or by vote of a majority of the outstanding 
voting securities of the investment company. Rule 12b-1(b)(4) requires that 
such plans may not be amended to increase materially the amount to be spent 
for distribution without shareholder approval and that all material 
amendments of the plan must be approved in the manner described in 
paragraph (b)(2) of Rule 12b-1.  Rule 12b-1(c) provides that the investment 
company may rely upon Rule 12b-1(b) only if selection and nomination of the 
investment company's disinterested directors are committed to the discretion 
of such disinterested directors.  Rule 12b-1(e) provides that the investment 
company may implement or continue a plan pursuant to Rule 12b-1(b) only if 
the directors who vote to approve such implementation or continuation 
conclude, in the exercise of reasonable business judgment and in light of 
their fiduciary duties under state law, and under Sections 36(a) and (b) of 
the Investment Company Act of 1940, that there is a reasonable likelihood 
that the plan will benefit the investment company and its shareholders.  At 
the Board of Directors meeting held January 14, 1997, the directors of the 
Funds so concluded.

       During the fiscal year ended September 30, 1996, each of the Advantus 
Load Funds made payments under its Plans of Distribution applicable to Class 
A, Class B and Class C shares as follows (distribution fees waived by MIMLIC 
Sales, if any, are shown in parentheses):
   
                                           Class A        Class B   Class C

     Horizon Fund                     $76,167   (28,836)   43,537     5,667
     Spectrum Fund                    195,074       n/a    54,073     6,379
     Mortgage Securities Fund          55,737   (15,693)   23,440     7,020
     Bond Fund                         15,975   (31,952)   23,386     3,362
     Cornerstone Fund                  37,227   (74,454)   36,779     4,644
     Enterprise Fund                   34,392   (68,785)   30,941     3,767
     International Fund                53,124   (53,123)      n/a     8,761
    

                                     -34-
<PAGE>

Money Market Fund made no payments under its Plan of Distribution during the 
fiscal year ended September 30, 1996.  MIMLIC Sales waived distribution 
fees from Money Market Fund in the amount of $119,211 during such period.

       The Plans of Distribution could be construed as "compensation plans" 
because MIMLIC Sales is paid a fixed fee and is given discretion concerning 
what expenses are payable under the Plans.  Under a compensation plan, the 
fee to the distributor is not directly tied to distribution expenses actually 
incurred by the distributor, thereby permitting the distributor to receive a 
profit if amounts received exceed expenses. MIMLIC Sales may spend more or 
less for the distribution and promotion of the Funds' shares than it receives 
as distribution fees pursuant to the Plans.  However, to the extent fees 
received exceed expenses, including indirect expense such as overhead, MIMLIC 
Sales could be said to have received a profit.

                  MONEY MARKET FUND AMORTIZED COST METHOD OF
                             PORTFOLIO VALUATION

       Money Market Fund values its portfolio securities at amortized cost in 
accordance with Rule 2a-7 under the Investment Company Act of 1940, as 
amended.  This method involves valuing an instrument at its cost and 
thereafter assuming a constant amortization to maturity of any discount or 
premium, regardless of the impact of fluctuations in interest rates on the 
market value of the instrument and regardless of any unrealized capital gains 
or losses.  While this method provides certainty in valuation, it may result 
in periods during which value, as determined by amortized cost, is higher or 
lower than the price the Fund would receive if it sold the instrument.  
During periods of declining interest rates, the daily yield on shares of the 
Fund computed by dividing the annualized daily income of the Fund by the net 
asset value computed as described above may tend to be higher than a like 
computation made by the Fund with identical investments utilizing a method of 
valuation based upon market prices and estimates of market prices for all of 
its securities.

       Pursuant to Rule 2a-7, the Board of Directors of the Fund has 
determined, in good faith based upon a full consideration of all material 
factors, that it is in the best interests of the Fund and its shareholders to 
maintain a stable net asset value per share by virtue of the amortized cost 
method of valuation.  The Fund will continue to use this method only so long 
as the Board of Directors believes that it fairly reflects the market-based 
net asset value per share.  In accordance with Rule 2a-7, the Board of 
Directors has undertaken, as a particular responsibility within the overall 
duty of care owed to the Fund's shareholders, to establish procedures 
reasonably designed, taking into account current market conditions and the 
Fund's investment objectives, to stabilize the Fund's net asset value per 
share at a single value.  These procedures include the periodic determination 
of any deviation of current net asset value per share calculated using 
available market quotations from the Fund's amortized cost price per share, 
the periodic review by the Board of the amount of any such deviation and the 
method used to calculate any such deviation, the maintenance of records of 
such determinations and the Board's review thereof, the prompt consideration 
by the Board if any such deviation exceeds 1/2 of 1%, and the taking of such 
remedial action by the Board as it deems appropriate where it believes the 
extent of any such deviation may result in material dilution or other unfair 
results to investors or existing


                                     -35-
<PAGE>

shareholders.  Such remedial action may include redemptions in kind, selling 
portfolio instruments prior to realizing capital gains or losses, shortening 
the average portfolio maturity, withholding dividends or utilizing a net 
asset value per share as determined by using available market quotations.

       The Fund will, in further compliance with Rule 2a-7, maintain a 
dollar-weighted average portfolio maturity not exceeding 90 days and will 
limit its portfolio investments to those United States dollar-denominated 
instruments which the Board determines present minimal credit risks and which 
are eligible securities.  The Fund will limit its investments in the 
securities of any one issuer to no more than 5% of the Fund's total assets 
and it will limit investment in securities of less than the highest rated 
category to 5% of the Fund's total assets.  Investment in the securities of 
any issuer of less than the highest rated category will be limited to the 
greater of 1% of the Fund's total assets or one million dollars.  In 
addition, the Fund will reassess promptly any security which is in default or 
downgraded from its rating category to determine whether that security then 
presents minimal credit risks and whether continuing to hold the securities 
is in the best interests of the Fund.  In addition, the Fund will record, 
maintain, and preserve a written copy of the above-described procedures and a 
written record of the Board's considerations and actions taken in connection 
with the discharge of its above-described responsibilities.

              PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE

HORIZON FUND, SPECTRUM FUND, CORNERSTONE FUND AND ENTERPRISE FUND

       In a number of security transactions, it is possible for Horizon Fund, 
Spectrum Fund, Cornerstone Fund and Enterprise Fund to deal in the 
over-the-counter security markets (including the so-called "third market" 
which is the "over-the-counter" market for securities listed on the New York 
Stock Exchange) without the payment of brokerage commissions but at net 
prices including a spread or markup; these Funds trade in this manner 
whenever the net price appears advantageous.

MORTGAGE SECURITIES FUND AND BOND FUND

       Portfolio transactions of Mortgage Securities Fund and Bond Fund occur 
primarily with issuers, underwriters or major dealers acting as principals.  
Such transactions are normally on a net basis which do not involve payment of 
brokerage commissions.  The cost of securities purchased from an underwriter 
usually includes a commission paid by the issuer to the underwriters; 
transactions with dealers normally reflect the spread between bid and asked 
prices.  Premiums are paid with respect to options purchased by these two 
Funds and brokerage commissions are payable with respect to transactions in 
exchange-traded interest rate futures contracts.

MONEY MARKET FUND

       Most transactions in portfolio securities of Money Market Fund are 
purchases from issuers or dealers in money market instruments acting as 
principal.  There usually are no brokerage commissions paid by the Fund for 
such purchases since securities are purchased on a net price


                                     -36-
<PAGE>

basis.  Trading does, however, involve transaction costs.  Transactions with 
dealers serving as primary market makers reflect the spread between the bid 
and asked prices of securities.  Purchases of underwritten issues may be made 
which reflect a fee paid to the underwriter.

INTERNATIONAL FUND

       Templeton Counsel, as investment sub-adviser to the International 
Fund, is primarily responsible for selecting and (where applicable) 
negotiating commissions with the brokers who execute the transactions for the 
Fund.  Templeton Counsel, in managing the International Fund, follows the 
same basic brokerage practices as those described below for Advantus Capital. 
In addition, in selecting brokers for portfolio transactions, Templeton 
Counsel takes into account its past experience as to brokers qualified to 
achieve "best execution," including the ability to effect transactions at all 
where a large block is involved, availability of the broker to stand ready to 
execute possibly difficult transactions in the future, the financial strength 
and stability of the broker, and whether the broker specializes in foreign 
securities held by the International Fund.  Purchases and sales of portfolio 
securities within the United States other than on a securities exchange are 
executed with primary market makers acting as principal, except where, in the 
judgment of Templeton Counsel, better prices and execution may be obtained on 
a commission basis or from other sources.

GENERALLY
   
     Advantus Capital selects and (where applicable) negotiates commissions with
the brokers who execute the transactions for the Funds (except for International
Fund, as described above).  During the fiscal years ended September 30, 1996 and
1995, and the fiscal period ended September 30, 1994 brokerage commissions paid
were:
    
         Fund                          1996      1995      1994

     Horizon Fund                     $71,278   $40,274   $30,332
     Spectrum Fund                     69,801    63,194    60,362
     Mortgage Securities Fund             -0-       -0-       -0-
     Money Market Fund                    -0-       -0-       -0-
     Bond Fund                            -0-       -0-       -0-
     Cornerstone Fund                 165,563   146,804    18,326
     Enterprise Fund                   39,583    29,639    10,942
     International Fund                34,467    42,199    33,746

       The primary criteria for the selection of a broker is the ability of 
the broker, in the opinion of Advantus Capital, to secure prompt execution of 
the transactions on favorable terms, including the reasonableness of the 
commission and considering the state of the market at the time.  In selecting 
a broker, Advantus Capital considers whether such broker provides brokerage 
and research services (as defined in the Securities Exchange Act of 1934), 
and generally the Funds pay higher than the lowest commission rates 
available.  Advantus Capital may direct Fund transactions to brokers who 
furnish research services to Advantus Capital.  Such research services 
include advice, both directly and in writing, as to the value of securities, 
the advisability


                                     -37-
<PAGE>

of investing in, purchasing or selling securities, and the availability of 
securities or purchasers or sellers of securities, as well as analyses and 
reports concerning issues, industries, securities, economic factors and 
trends, portfolio strategy, and the performance of accounts.  By allocating 
brokerage business in order to obtain research services for Advantus Capital, 
the Funds enable Advantus Capital to supplement its own investment research 
activities and allows Advantus Capital to obtain the views and information of 
individuals and research staffs of many different securities research firms 
prior to making investment decisions for the Funds.  To the extent such 
commissions are directed to these other brokers who furnish research services 
to Advantus Capital, Advantus Capital receives a benefit, not capable of 
evaluation in dollar amounts, without providing any direct monetary benefit 
to the Funds from these commissions.

       There is no formula for the allocation by Advantus Capital of the 
Funds' brokerage business to any broker-dealer for brokerage and research 
services.  However, Advantus Capital will authorize a Fund to pay an amount 
of commission for effecting a securities transaction in excess of the amount 
of commission another broker would have charged only if Advantus Capital 
determines in good faith that such amount of commission is reasonable in 
relation to the value of the brokerage and research services provided by such 
broker viewed in terms of either that particular transaction or Advantus 
Capital's overall responsibilities with respect to the accounts as to which 
it exercises investment discretion.  During the fiscal year ended September 
30, 1996, Horizon Fund, Spectrum Fund, Cornerstone Fund, Enterprise Fund and 
International Fund directed transactions to brokers because of research 
services they provided, and paid commissions in connection with such 
transactions, in the aggregate amounts set forth below:
   
                               Aggregate Transactions    Commissions Paid On
            Fund               Directed for Research     Directed Transactions
            ----               ----------------------    ---------------------

       Horizon Fund                 $57,022,191               $ 71,278
       Spectrum Fund                 57,704,990                 69,801
       Cornerstone Fund              46,114,966                165,563
       Enterprise Fund               93,879,798                 39,583
       International Fund            10,400,924                 34,467
    
During the same period, Mortgage Securities Fund, Money Market Fund and Bond 
Fund directed no transactions to brokers because of research services they 
provided.

       No brokerage is allocated for the sale of Fund shares.  Advantus 
Capital believes that most research services obtained by it generally benefit 
one or more of the investment companies which it manages and also benefit 
accounts which it manages.  Normally research services obtained through 
managed funds and managed accounts investing in common stocks would primarily 
benefit such funds and accounts; similarly, services obtained from 
transactions in fixed income securities would be of greater benefit to the 
managed funds and managed accounts investing in debt securities.

       The same security may be suitable for one or more of the Funds and the 
other funds or private accounts managed by Advantus Capital or its 
affiliates.  If and when two or more funds or


                                     -38-
<PAGE>

accounts simultaneously purchase or sell the same security, the transactions 
will be allocated as to price and amount in accordance with arrangements 
equitable to each fund or account.  The simultaneous purchase or sale of the 
same securities by one Fund and other Funds or accounts may have a 
detrimental effect on that Fund, as this may affect the price paid or 
received by the Fund or the size of the position obtainable by the Fund.

       The Funds will not execute portfolio transactions through any 
affiliate, unless such transactions, including the frequency thereof, the 
receipt of commissions payable in connection therewith and the selection of 
the affiliated broker-dealer effecting such transactions are not unfair or 
unreasonable to the shareholders of the Funds.  In the event any transactions 
are executed on an agency basis, Advantus Capital will authorize the Funds to 
pay an amount of commission for effecting a securities transaction in excess 
of the amount of commission another broker-dealer would have charged only if 
Advantus Capital determines in good faith that such amount of commission is 
reasonable in relation to the value of the brokerage and research services 
provided by such broker-dealer, viewed in terms of either that particular 
transaction or the overall responsibilities of Advantus Capital with respect 
to the Funds as to which it exercises investment discretion.  If the Funds 
execute any transactions on an agency basis, they will generally pay higher 
than the lowest commission rates available.

       In determining the commissions to be paid to an affiliated 
broker-dealer, it is the policy of the Funds that such commissions will, in 
the judgment of Advantus Capital, subject to review by the Fund's Board of 
Directors, be both (a) at least as favorable as those which would be charged 
by other qualified brokers in connection with comparable transactions 
involving similar securities being purchased or sold on an exchange during a 
comparable period of time, and (b) at least as favorable as commissions 
contemporaneously charged by such affiliated broker-dealers on comparable 
transactions for their most favored comparable unaffiliated customers.  While 
the Funds do not deem it practicable and in their best interest to solicit 
competitive bids for commission rates on each transaction, consideration will 
regularly be given to posted commission rates as well as to other information 
concerning the level of commissions charged on comparable transactions by 
other qualified brokers.

       Information regarding the acquisition by the Funds during the fiscal 
year ended September 30, 1996, of securities of the Funds' regular brokers or 
dealers, or the parents of those broker or dealers that derive more than 15 
percent of their gross revenue from securities-related activities, is 
presented below:


                                     -39-
<PAGE>
   
                                                                Approximate
                                                            Value of Securities
                                                              Owned at End of
                                   Name of Issuer              Fiscal Period
                                   --------------           -------------------

Horizon Fund                       Norwest Corporation        $   463,931
Spectrum Fund                      Norwest Financial              713,915
                                   Lehman Brothers                506,637
                                   Ford Motor Credit              803,792
                                   GMAC                           763,169
Cornerstone Fund                   Ford Motor Credit            1,118,750
International Balanced Fund        Deutsche Bank                  764,416
    
                         CALCULATION OF PERFORMANCE DATA

MONEY MARKET FUND

        Money Market Fund may issue "current yield" and "effective yield" 
quotations.  "Current yields" are computed by determining the net change in 
the value of a hypothetical account having a balance of one share at the 
beginning of a recent seven calendar day period, and multiplying that change 
by 365/7.  "Effective yields" are computed by determining the net change in 
the value of a hypothetical account having a balance of one share at the 
beginning of a recent seven calendar day period, dividing that change by 
seven, adding one to the quotient, raising the sum to the 365th power, and 
subtracting one from the result.  For purposes of the foregoing calculations, 
the value of the hypothetical account includes accrued interest income plus 
or minus amortized purchase discount or premium less accrued expenses, but 
does not include realized gains and losses or unrealized appreciation and 
depreciation.  The Fund will also quote the average dollar-weighted portfolio 
maturity for the corresponding seven-day period.

       Although there can be no assurance that the net asset value of Money 
Market Fund's shares will always be $1.00, Advantus Capital does not expect 
that the net asset value of its shares will fluctuate since the Fund uses the 
amortized cost method of valuation to maintain a stable $1.00 net asset 
value.  See "Money Market Fund Amortized Cost Method of Portfolio Valuation." 
Principal is not, however, insured.  Yield is a function of portfolio 
quality and composition, maturity, and operating expenses.  Yield information 
is useful in reviewing the Fund's performance, but it may not provide a basis 
for comparison with bank deposits or other investments, which pay a fixed 
yield for a stated period of time, or other investment instruments, which may 
use a different method of calculating yield.

       For the seven calendar days ended September 30, 1996, Money Market 
Fund's annualized current yield was 4.55% and its annualized effective yield 
was 4.66%.  The Fund's investment adviser was voluntarily absorbing certain 
expenses of the Fund during that period.  If the Fund had been charged these 
expenses its current yield and effective yield for the same period would have 
been 3.79% and 3.86%, respectively.


                                      -40-
<PAGE>

ADVANTUS LOAD FUNDS

       Advertisements and other sales literature for the Advantus Load Funds 
may refer to "yield," "average annual total return" and "cumulative total 
return."  Performance quotations are computed separately for each class of 
shares of the Advantus Load Funds.

       YIELD.  Yield is computed by dividing the net investment income per 
share (as defined under Securities and Exchange Commission rules and 
regulations) earned during the computation period by the maximum offering 
price per share on the last day of the period, according to the following 
formula:

                                        a-b
                           YIELD = 2[( ----- +1)6-1]
                                        cd

                      Where:  a = dividends and interest earned during 
                                  the period;

                              b = expenses accrued for the period (net
                                  of reimbursements);

                              c = the average daily number of shares 
                                  outstanding during the period that were 
                                  entitled to receive dividends; and

                              d = the maximum offering price per share on the
                                  last day of the period.
   
       The yield on investments in each of these Funds for the 30 day period 
ended September 30, 1996 was as set forth in the table below.  The Funds' 
investment adviser and distributor were voluntarily absorbing and waiving 
certain expenses of certain of the Funds during that period.  If such Funds 
had been charged for these expenses the yield on investments for the same 
period would have been lower, as also shown in the table below in parentheses.
    
   
    Fund                                         Yield
    ----                                         -----

                            Class A             Class B             Class C
                            -------             -------             -------

Horizon Fund              -.24   (-.29)       -.97   (-.97)       -.97   (-.97)
Spectrum Fund             2.61   (2.61)       2.11   (2.11)       2.11   (2.11)
Mortgage Securities Fund  5.89   (5.79)       5.46   (5.41)       5.47   (5.42)
Bond Fund                 5.88   (5.45)       5.31   (5.07)       5.30   (5.07)
Cornerstone Fund          1.30   (1.10)        .48    (.48)        .49    (.49)
Enterprise Fund           -.22   (-.42)      -1.08  (-1.08)      -1.08  (-1.08)
International Fund        2.21   (2.06)        n/a     n/a        1.50   (1.50)
    

                                      -41-
<PAGE>

       AVERAGE ANNUAL TOTAL RETURN.  Average annual total return is computed 
by finding the average annual compounded rates of return over the periods 
indicated in the advertisement that would equate the initial amount invested 
to the ending redeemable value, according to the following formula:

                                 P(1+T)n = ERV

                      Where:  P = a hypothetical initial payment of $1,000;

                              T = average annual total return;

                              n = number of years; and

                            ERV = ending redeemable value at the end of the 
                                  period of a hypothetical $1,000 payment made
                                  at the beginning of such period.


       The average annual total return on investments in each of the Advantus 
Load Funds for the periods indicated ending September 30, 1996, were as set 
forth in the table below.  The Funds' investment adviser and distributor were 
voluntarily absorbing and waiving certain expenses of certain of the Funds 
during these periods.  If such Funds had been charged for these expenses the 
average annual total returns for the same periods would have been lower, as 
also shown in the table below in parentheses.


                                      -42-

<PAGE>
   
<TABLE>
<CAPTION>

                                                      1 Year                                          5 Year 
                                                      ------                                          ------
FUND                              CLASS A             CLASS B              CLASS C            CLASS A         CLASS B   CLASS C
                                  -------             -------              -------            -------         -------   -------
<S>                            <C>      <C>        <C>      <C>        <C>      <C>        <C>      <C>       <C>       <C>

Horizon Fund(1)                11.4%    (11.3%)    11.3%    (11.3%)    16.3%    (16.3%)    11.0%    (10.9%)     n/a       n/a
Spectrum Fund(2)                8.0%     (8.0%)     8.1%     (8.1%)    12.9%    (12.9%)     8.9%     (8.9%)     n/a       n/a
Mortgage Securities Fund(1)    -0.4%     (-.6%)    -0.9%    (-1.0%)     4.1%     (4.0%)     5.8%     (5.6%)     n/a       n/a
Bond Fund(3)                   -1.2%    (-1.9%)    -1.9%    (-2.3%)     3.1%     (2.7%)     6.2%     (5.4%)     n/a       n/a
Cornerstone Fund(4)            18.3%    (18.1%)    18.4%    (18.4%)    23.6%    (23.6%)      n/a        n/a     n/a       n/a
Enterprise Fund(4)             10.8%    (10.6%)    10.7%    (10.7%)    15.6%    (15.6%)      n/a        n/a     n/a       n/a
International Balanced Fund(5)  5.2%     (5.1%)      n/a        n/a     9.9%     (9.9%)      n/a        n/a     n/a       n/a

<CAPTION>

                                                  10 Year                                 Since Inception
                                                  -------                                 ---------------
FUND                               CLASS A        CLASS B   CLASS C        CLASS A             CLASS B             CLASS C
                                   -------        -------   -------        -------             -------             -------
<S>                            <C>      <C>       <C>       <C>        <C>      <C>        <C>      <C>        <C>      <C>

Horizon Fund                   12.6%    (12.4%)     n/a       n/a        n/a        n/a    18.1%    (18.1%)    22.4%    (22.4%)
Spectrum Fund                    n/a        n/a     n/a       n/a      10.6%     (9.9%)    13.0%    (13.0%)    16.3%    (16.3%)
Mortgage Securities Fund        7.5%     (7.4%)     n/a       n/a        n/a        n/a     5.9%     (5.8%)     7.6%     (7.5%)
Bond Fund                        n/a        n/a     n/a       n/a       7.4%     (6.4%)     5.7%     (5.1%)     7.8%     (7.3%)
Cornerstone Fund                 n/a        n/a     n/a       n/a      20.1%    (19.6%)    20.6%    (20.4%)    28.3%    (28.1%)
Enterprise Fund                  n/a        n/a     n/a       n/a      18.2%    (17.9%)    18.6%    (18.6%)    23.1%    (23.1%)
International Balanced Fund      n/a        n/a     n/a       n/a       5.2%     (5.0%)      n/a        n/a    12.9%    (12.9%)

</TABLE>
    
- -----------------
   
(1) Class A Inception May 3, 1985.
    Class B Inception August 19, 1994.
    Class C Inception March 1, 1995.
(2) Class A Inception November 16, 1987.
    Class B Inception August 19, 1994.
    Class C Inception March 1, 1995.
(3) Class A Inception August 14, 1987.
    Class B Inception August 19, 1994.
    Class C Inception March 1, 1995.
(4) Class A and Class B Inception September 16, 1994.
    Class C Inception March 1, 1995.
(5) Class A Inception September 16, 1994.
    Class C Inception March 1, 1995.
    
                                           -43-

<PAGE>

       CUMULATIVE TOTAL RETURN.  Cumulative total return figures are computed 
by finding the cumulative compounded rate of return over the period indicated 
in the advertisement that would equate the initial amount invested to the 
ending redeemable value, according to the following formula:

                               ERV-P
                      CTR = ( ------- )100
                                P

        Where:   CTR = Cumulative total return

                 ERV = ending redeemable value at the end of the period of a 
                       hypothetical $1,000 payment made at the beginning of
                       such period; and

                   P = initial payment of $1,000.

       The cumulative total return on investments in each of the Advantus 
Load Funds for the period indicated ended September 30, 1996, was a set forth 
in the table below.  The Funds' investment adviser was voluntarily absorbing 
certain expenses of certain of the Funds during these periods.  If such Funds 
had been charged for these expenses the cumulative total return for the same 
periods would have been lower, as also shown in the table below in 
parentheses.

                                           Cumulative Total Return
                                           -----------------------

Fund                              Class A          Class B          Class C
- ----                              -------          -------          -------

Horizon Fund(1)               234.8%  (227.3%)  42.3%  (42.3%)   37.8%  (37.8%)
Spectrum Fund(2)              145.3%  (131.7%)  29.6%  (29.6%)   27.2%  (27.2%)
Mortgage Securities Fund(1)   152.3%  (146.3%)  13.0%  (12.9%)   12.3%  (12.2%)
Bond Fund(3)                   92.0%   (75.5%)  12.5%  (11.1%)   12.7%  (11.8%)
Cornerstone Fund(4)            45.3%   (44.2%)  46.5%  (46.2%)   48.5%  (48.3%)
Enterprise Fund(4)             40.6%   (40.0%)  41.8%  (41.6%)   39.2%  (39.1%)
International Fund(4)          10.9%   (10.5%)   n/a     n/a     21.2%  (21.2%)

- -------------------

(1) Class A Inception May 3, 1985.
    Class B Inception August 19, 1994.
    Class C Inception March 1, 1995.
(2) Class A Inception November 16, 1987.
    Class B Inception August 19, 1994.
    Class C Inception March 1, 1995.
(3) Class A Inception August 14, 1987.
    Class B Inception August 19, 1994.
    Class C Inception March 1, 1995.
(4) Class A and Class B Inception September 16, 1994.
    Class C Inception March 1, 1995.

       The calculations for both average annual total return and cumulative 
total return deduct the maximum sales charge from the initial hypothetical 
$1,000 investment, assume all dividends and capital gain distributions are 
reinvested at net asset value on the appropriate reinvestment dates


                                    -44-
<PAGE>

as described in the Prospectus, and include all recurring fees, such as 
investment advisory and management fees, charged as expenses to all 
shareholder accounts.

       Such average annual total return and cumulative total return figures 
may also be accompanied by average annual total return and cumulative total 
return figures, for the same or other periods, which do not reflect the 
deduction of any sales charges.

                    CAPITAL STOCK AND OWNERSHIP OF SHARES

       Each Fund's shares of common stock, and each class thereof, have a par 
value $.01 per share, and have equal rights to share in dividends and assets. 
The shares possess no preemptive or conversion rights. Cumulative voting is 
not authorized.  This means that the holders of more than 50% of the shares 
voting for the election of directors can elect 100% of the directors if they 
choose to do so, and in such event the holders of the remaining shares will 
be unable to elect any directors.

       Each of the Funds has 10 billion authorized shares of common stock.  
Each of the Advantus Load Funds has designated 2 billion authorized shares as 
Class A shares, 2 billion authorized shares as Class B shares and 2 billion 
authorized shares as Class C shares.  The Funds have the following numbers of 
shares outstanding:


                                    Shares Outstanding at September 30, 1996
                                    ----------------------------------------
      Fund                           Class A         Class B        Class C
      ----                           -------         -------        -------
Horizon Fund                        1,492,347        274,555         44,904
Spectrum Fund                       3,789,331        508,117         87,506
Mortgage Securities Fund            2,316,394        329,660        111,298
Money Market Fund                  43,952,661            n/a            n/a
Bond Fund                           1,647,992        352,313         66,320
Cornerstone Fund                    3,212,050        475,384         77,366
Enterprise Fund                     2,428,973        311,533         51,600
International Fund                  3,535,447            n/a        158,872

     As of September 30, 1996, no person held of record, to the knowledge of the
respective Funds, or owned more than 5% of the outstanding shares of any of the
Funds, except as set forth in the following table:


                                      -45-
<PAGE>

                                                                     Number of
Name and Address of Shareholder                Shares               Percentage
- -------------------------------                ------               ----------

HORIZON FUND
   Minnesota Mutual and affiliates*              99,098                 5.5%

SPECTRUM FUND
   Minnesota Mutual and affiliates*              34,769                  .8%

MORTGAGE SECURITIES FUND
   Minnesota Mutual and affiliates*             235,114                 8.5%

MONEY MARKET FUND
   Minnesota Mutual and affiliates*          12,127,229                27.6%

BOND FUND
   Minnesota Mutual and affiliates*             379,452                18.4%

CORNERSTONE FUND
   Minnesota Mutual and affiliates*           2,141,636                56.9%

ENTERPRISE FUND
   Minnesota Mutual and affiliates*           2,050,145                73.4%

INTERNATIONAL FUND
   Minnesota Mutual and affiliates*           2,500,486                67.7%

  * 400 Robert Street North, St. Paul, Minnesota 55101.


                             HOW TO BUY SHARES

       The procedures for purchasing shares of the Funds are summarized in 
the Prospectus following the caption "Purchase of Fund Shares."

       In addition to purchases of shares through insurance agents and 
employees of Minnesota Mutual who are registered representatives of MIMLIC 
Sales and who are licensed under applicable state and federal laws, shares 
may also be purchased in writing as described in the Prospectus through firms 
which are members of the National Association of Securities Dealers, Inc. and 
which have selling agreements with MIMLIC Sales.

                  NET ASSET VALUE AND PUBLIC OFFERING PRICE

     The method for determining the public offering price and net asset value 
per share is summarized in the Prospectus in the text following the headings 
"Purchase of Fund Shares" and "Sales Charges."

       Shares of Money Market Fund may be purchased at a price equal to their 
net asset value, which will normally be constant at $1.00 per share.  See 
"Money Market Fund Amortized Cost Method of Valuation."  There is no 
assurance that Money Market Fund can maintain the $1.00 per share value.  The 
portfolio securities in which the Advantus Load Funds invest fluctuate in 
value, and hence the net asset value per share of each Fund also fluctuates.


                                  -46-
<PAGE>

       On September 30, 1996, the net asset value and public offering price 
per share for Class A, Class B and Class C shares of each of the Funds 
(except Money Market Fund) were calculated as follows:

                                  HORIZON FUND

CLASS A SHARES

    Net Assets ($34,435,290)    = Net Asset Value Per Share ($23.07)
- ------------------------------
Shares outstanding (1,492,347)

To obtain the maximum public offering price per share, the Fund's 5% sales
charge must be added to the net asset value obtained above:

          $23.07 = Public Offering Price Per Share ($24.28)
          ------
           .95

CLASS B SHARES

    Net Assets ($6,219,403)    = Net Asset Value AND Public
- ----------------------------
Shares outstanding (274,555)     Offering Price Per Share ($22.65)

CLASS C SHARES


    Net Assets ($1,017,786)    = Net Asset Value AND Public
- -----------------------------
Shares outstanding (44,904)      Offering Price Per Share ($22.67)


                                  SPECTRUM FUND

CLASS A SHARES

    Net Assets ($58,847,547)   = Net Asset Value Per Share ($15.53)
- ------------------------------
Shares outstanding (3,789,331)

To obtain the maximum public offering price per share, the Fund's 5% sales
charge must be added to the net asset value obtained above:

          $15.53 = Public Offering Price Per Share ($16.35)
          ------
           .95

CLASS B SHARES

    Net Assets ($7,860,433)    = Net Asset Value AND Public
- ----------------------------
Shares outstanding (508,117)     Offering Price Per Share ($15.47)

CLASS C SHARES

   Net Assets ($1,350,599)     = Net Asset Value AND Public
- ---------------------------
Shares Outstanding (87,506)      Offering Price Per Share ($15.43)


                                      -47-
<PAGE>
                            MORTGAGE SECURITIES FUND

CLASS A SHARES

    Net Assets ($23,692,254)   = Net Asset Value Per Share ($10.23)
- ------------------------------
Shares outstanding (2,316,394)

To obtain the maximum public offering price per share, the Fund's 5% sales
charge must be added to the net asset value obtained above:

          $10.23  = Public Offering Price Per Share ($10.77)
          ------
           .95

CLASS B SHARES

    Net Assets ($3,374,944)    = Net Asset Value and Public
- ----------------------------
Shares outstanding (329,660)     Offering Price Per Share ($10.24)


CLASS C SHARES

    Net Assets ($1,138,654)    = Net Asset Value and Public
- ----------------------------
Shares outstanding (111,298)     Offering Price Per Share ($10.23)

                                    BOND FUND

CLASS A SHARES

    NET ASSETS ($16,527,548)   = Net Asset Value Per Share ($10.03)
- ------------------------------
Shares outstanding (1,647,992)

To obtain the maximum public offering price per share, the Fund's 5% sales
charge must be added to the net asset value obtained above:

           $10.03 = Public Offering Price Per Share ($10.56)
           ------
            .95

CLASS B SHARES

    Net Assets ($3,531,907)    = Net Asset Value and Public
- ----------------------------
Shares outstanding (352,313)     Offering Price Per Share ($10.02)

CLASS C SHARES

   
    Net Assets ($664,576)      = Net Asset Value AND Public
- ---------------------------
Shares outstanding (66,320)       Offering Price Per Share ($10.02)
    
                                CORNERSTONE FUND

CLASS A SHARES

   Net Assets ($48,382,876)    = Net Asset Value Per Share ($15.06)
- ------------------------------
Shares outstanding (3,212,050)

To obtain the maximum public offering price per share, the Fund's 5% sales
charge must be added to the net asset value obtained above:


                                      -48-
<PAGE>

           $15.06 = Public Offering Price Per Share ($15.85)
           ------
           .95

CLASS B SHARES

    Net Assets ($7,094,860)    = Net Asset Value AND Public
- ----------------------------
Shares outstanding (475,384)     Offering Price Per Share ($14.92)

Class C Shares

    Net Assets ($1,155,510)    = Net Asset Value AND Public
- ---------------------------
Shares outstanding (77,366)      Offering Price Per Share ($14.94)

                                 ENTERPRISE FUND

CLASS A SHARES

    Net Assets ($38,722,005)   = Net Asset Value Per Share ($15.94)
- ------------------------------
Shares outstanding (2,428,973)

To obtain the maximum public offering price per share, the Fund's 5% sales
charge must be added to the net asset value obtained above:

           $15.94 = Public Offering Price Per Share ($16.78)
           ------
            .95

CLASS B SHARES

    Net Assets ($4,871,486)    = Net Asset Value AND Public
- ----------------------------
Shares outstanding (311,533)     Offering Price Per Share ($15.64)

CLASS C SHARES

    Net Assets ($806,721)      = Net Asset Value AND Public
- ---------------------------
Shares outstanding (51,600)      Offering Price Per Share ($15.63)

                               INTERNATIONAL FUND

CLASS A SHARES

    Net Assets ($40,380,900)   = Net Asset Value Per Share ($11.42)
- ------------------------------
Shares outstanding (3,535,447)

To obtain the maximum public offering price per share, the Fund's 5% sales
charge must be added to the net asset value obtained above:

           $11.42 = Public Offering Price Per Share ($12.02)
           ------
            .95

CLASS C SHARES

    Net Assets ($1,810,902)    = Net Asset Value AND Public
- ----------------------------
Shares outstanding (158,872)     Offering Price Per Share ($11.40)

                              REDUCED SALES CHARGES

Special purchase plans are enumerated in the text of each Fund's Prospectus
immediately following the caption "Special Purchase Plans" and are fully
described below.


                                      -49-
<PAGE>

RIGHT OF ACCUMULATION-CUMULATIVE PURCHASE DISCOUNT

       The front end sales charge and contingent deferred sales charge 
applicable to each purchase of Class A shares and Class B shares, 
respectively, of the Advantus Load Funds is based on the next computed net 
asset value of all Class A, Class B and Class C shares of such Funds held by 
the shareholder (including dividends reinvested and capital gains 
distributions accepted in shares), plus the cost of all Class A, Class B and 
Class C shares of such Funds currently being purchased.  It is the obligation 
of each shareholder desiring this discount in sales charge to notify MIMLIC 
Sales, through his or her dealer or otherwise, that he or she is entitled to 
the discount.

LETTER OF INTENT

       The applicable sales charge is based on total purchases over a 
13-month period where there is an initial purchase equal to or exceeding 
$250, accompanied by filing with MIMLIC Sales a signed "Letter of Intent" 
form to purchase, and by in fact purchasing not less than $50,000 of shares 
in one of the Funds (except Money Market Fund) within that time.  The 
13-month period is measured from the date the Letter of Intent is approved by 
MIMLIC Sales, or at the purchaser's option, it may be made retroactive 90 
days, in which case MIMLIC Sales will make appropriate adjustments on 
purchases during the 90-day period.

       In computing the total amount purchased for purposes of determining 
the applicable sales charge, the net asset value of Class A, Class B and 
Class C shares currently held in all Advantus Load Funds, on the date of the 
first purchase under the Letter of Intent, may be used as a credit toward 
Fund shares to be purchased under the Letter of Intent.  Class A, Class B and 
Class C shares of all the Advantus Load Funds may also be included in the 
purchases during the 13-month period.

       The Letter of Intent includes a provision for payment of additional 
applicable sales charges at the end of the period in the event the investor 
fails to purchase the amount indicated.  In the case of Class A shares, this 
is accomplished by holding 5% of the investor's initial purchase in escrow.  
If the investor's purchases equal those specified in the Letter of Intent, 
the escrow is released.  If the purchases do not equal those specified in the 
Letter of Intent, he or she may remit to MIMLIC Sales an amount equal to the 
difference between the dollar amount of sales charges actually paid and the 
amount of sales charges that would have been paid on the aggregate purchases 
if the total of such purchases had been made at a single time.  If the 
purchaser does not remit this sum to MIMLIC Sales on a timely basis, MIMLIC 
Sales will redeem the appropriate number of shares, and then release or 
deliver any remaining shares in the escrow account.  In the case of Class B 
shares, if the investor fails to purchase shares in the amount indicated, the 
contingent deferred sales charge applicable to purchased Class B shares will 
be calculated without regard to the Letter of Intent.  The Letter of Intent 
is not a binding obligation on the part of the investor to purchase, or the 
respective Fund to sell, the full amount indicated.  Nevertheless, the Letter 
of Intent should be read carefully before it is signed.


                                      -50-
<PAGE>

COMBINING PURCHASES

       With respect to each of the Advantus Load Funds, purchases of Class A, 
Class B and Class C shares for any other account of the investor, or such 
person's spouse or minor children, or purchases on behalf of participants in 
a tax-qualified retirement plan may be treated as purchases by a single 
investor for purposes of determining the availability of a reduced sales 
charge.

PURCHASES OF CLASS A SHARES BY CERTAIN PERSONS AFFILIATED WITH THE FUND, 
ADVANTUS CAPITAL MIMLIC MANAGEMENT, TEMPLETON COUNSEL, MIMLIC SALES, 
MINNESOTA MUTUAL, OR ANY OF MINNESOTA MUTUAL'S OTHER AFFILIATED COMPANIES


       Directors and officers of Advantus Capital, MIMLIC Management, 
Templeton Counsel (with respect to International Fund only), MIMLIC Sales, 
the Funds, Minnesota Mutual, or any of Minnesota Mutual's other affiliated 
companies, and their full-time and part-time employees, sales representatives 
and retirees, any trust, pension, profit-sharing, or other benefit plan for 
such persons, the spouses, siblings, direct ancestors or direct descendents 
of such persons, Minnesota Mutual and its affiliates themselves, advisory 
clients of Advantus Capital or MIMLIC Management, employees of sales 
representatives employed in offices maintained by such sales representatives, 
certain accounts as to which a bank or broker-dealer charges an account 
management fee, provided the bank or broker-dealer has an agreement with 
MIMLIC Sales, and certain accounts sold by registered investment advisers who 
charge clients a fee for their services may purchase Class A shares of the 
Advantus Load Funds at net asset value.  These persons must give written 
assurance that they have bought for investment purposes, and that the 
securities will not be resold except through redemption or repurchase by, or 
on behalf of, the respective Fund.  These persons are not required to pay a 
sales charge because of the reduced sales effort involved in their purchases.

                             SHAREHOLDER SERVICES

OPEN ACCOUNTS

       A shareholder's investment is automatically credited to an open 
account maintained for the shareholder by Minnesota Mutual.  Stock 
certificates are not currently issued.  Following each transaction in the 
account, a shareholder will receive a confirmation statement disclosing the 
current balance of shares owned and the details of recent transactions in the 
account.  After the close of each year Minnesota Mutual sends to each 
shareholder a statement providing federal tax information on dividends and 
distributions paid to the shareholder during the year.  This should be 
retained as a permanent record.  A fee may be charged for providing duplicate 
information.

       The open account system provides for full and fractional shares 
expressed to four decimal places and, by making the issuance and delivery of 
stock certificates unnecessary, eliminates problems of handling and 
safekeeping, and the cost and inconvenience of replacing lost, stolen, 
mutilated or destroyed certificates.


                                      -51-
<PAGE>

       The costs of maintaining the open account system are paid by Advantus 
Capital in the case of the Advantus Load Funds.  The costs of maintaining the 
open account system for Money Market Fund are paid by the Fund.  No direct 
charges are made to shareholders.  Although the Funds have no present 
intention of making such direct charges to shareholders, they reserve the 
right to do so.  Shareholders will receive prior notice before any such 
charges are made.

SYSTEMATIC INVESTMENT PLAN

       Each Fund provides a convenient, voluntary method of purchasing shares 
in the Fund through its "Systematic Investment Plan".

       The principal purposes of the Plan are to encourage thrift by enabling 
you to make regular purchases in amounts less than normally required, and, in 
the case of the Advantus Load Funds, to employ the principle of dollar cost 
averaging, described below.

       By acquiring Fund shares on a regular basis pursuant to a Systematic 
Investment Plan, or investing regularly on any other systematic plan, the 
investor takes advantage of the principle of Dollar Cost Averaging.  Under 
Dollar Cost Averaging, if a constant amount is invested at regular intervals 
at varying price levels, the average cost of all the shares will be lower 
than the average of the price levels.  This is because the same fixed number 
of dollars buys more shares when price levels are low and fewer shares when 
price levels are high.  It is essential that the investor consider his or her 
financial ability to continue this investment program during times of market 
decline as well as market rise.  The principle of Dollar Cost Averaging will 
not protect against loss in a declining market, as a loss will result if the 
plan is discontinued when the market value is less than cost.

       A Plan may be opened by indicating your intention to invest $25 or 
more monthly for at least one year. You will receive a confirmation showing 
the number of shares purchased, purchase price, and subsequent new balance of 
shares accumulated.

       An investor has no obligation to invest regularly or to continue the 
Plan, which may be terminated by the investor at any time without penalty.  
Under the Plan, any distributions of income and realized capital gains will 
be reinvested in additional shares at net asset value unless a shareholder 
instructs MIMLIC Sales in writing to pay them in cash.  MIMLIC Sales reserves 
the right to increase or decrease the amount required to open and continue a 
Plan, and to terminate any Plan after one year if the value of the amount 
invested is less than $250.

GROUP SYSTEMATIC INVESTMENT PLAN

       This Plan provides employers and employees with a convenient means for 
purchasing shares of each Fund under various types of employee benefit and 
thrift plans, including payroll withholding and bonus incentive plans.  The 
Plan may be started with an initial cash investment of $50 per participant 
for a group consisting of five or more participants.  The shares purchased by 
each participant under the Plan will be held in a separate account in which 
all dividends and capital gains will be reinvested in additional shares of 
the Fund at net asset value.  To keep his or her account open, subsequent 
payments totaling $25 per month must be made into each


                                      -52-
<PAGE>

participant's account. If the group is reduced to less than five 
participants, the minimums set forth under "Systematic Investment Plan" shall 
apply.  The Plan may be terminated by MIMLIC Sales or the shareholder at any 
time upon reasonable notice.

AUTOMATIC INVESTMENT PLAN

       Each Fund offers an Automatic Investment Plan, which allows you to 
automatically invest a specified amount in the Fund each month.

       Shares of the respective Fund may be purchased through pre-authorized 
bank drafts.  With the cooperation of your bank, you may authorize MIMLIC 
Sales to make a withdrawal from your checking account on the 1st or 15th day 
of each month in the amount you specify to purchase shares of the Fund at the 
public offering price next determined after receipt of the proceeds from your 
bank draft.  A minimum initial investment of $25 is required, and the minimum 
subsequent monthly investment under this plan is $25.

       You may discontinue your Automatic Investment Plan at any time.  
Further information about the plans is available from MIMLIC Sales or your 
MIMLIC Sales representative.

GROUP PURCHASES

       An individual who is a member of a qualified group may also purchase 
shares of the Funds (except Money Market Fund) at the reduced sales charge 
applicable to the group taken as a whole.  The sales charge is calculated by 
taking into account not only the dollar amount of the Class A, Class B and 
Class C shares of the Funds being purchased by the individual member, but 
also the aggregate dollar value of such Class A, Class B and Class C shares 
previously purchased and currently held by other members of the group.  
Members of a qualified group may not be eligible for a Letter of Intent.

       A "qualified group" is one which (i) has been in existence for more 
than six months, (ii) has a purpose other than acquiring Fund shares at a 
discount, and (iii) satisfies uniform criteria which enable MIMLIC Sales to 
realize economies of scale in distributing such shares.  A qualified group 
must have more than ten members, must be available to arrange for group 
meetings between representatives of MIMLIC Sales, must agree to include sales 
and other materials related to the Funds in its publications and mailings to 
members at reduced or no cost to MIMLIC Sales, and must seek, upon request, 
to arrange for payroll deduction or other bulk transmission of investments to 
the Funds.

RETIREMENT PLANS OFFERING TAX BENEFITS

       The federal tax laws provide for a variety of retirement plans 
offering tax benefits.  These plans may be funded with shares of any of the 
Funds.  The plans include H.R. 10 (Keogh) plans for self-employed individuals 
and partnerships, individual retirement accounts (IRA's), corporate pension 
trust and profit sharing plans, including 401(k) plans, and retirement plans 
for public school systems and certain tax exempt organizations, e.g. 403(b) 
plans.


                                      -53-
<PAGE>

       The initial investment in each Fund by such a plan must be at least 
$250 for each participant in a plan, and subsequent investments must be at 
least $25 per month for each participant.  Income dividends and capital gain 
distributions must be reinvested.  Plan documents and further information can 
be obtained from MIMLIC Sales.

       An investor should consult a competent tax or other adviser as to the 
suitability of Fund shares as a vehicle for funding a plan, in whole or in 
part, under the Employee Retirement Income Security Act of 1974 and as to the 
eligibility requirements for a specific plan and its state as well as federal 
tax aspects, including changes made by the Tax Reform Act of 1986.

SYSTEMATIC WITHDRAWAL PLANS

       An investor owning shares in any one of the Funds having a value of 
$5,000 or more at the current public offering price may establish a 
Systematic Withdrawal Plan providing for periodic payments of a fixed or 
variable amount.  The Plan is particularly convenient and useful for trustees 
in making periodic distributions to retired employees.  Through this Plan a 
trustee can arrange for the retirement benefit to be paid directly to the 
employee by the respective Fund and to continue the tax-free accumulation of 
income and capital gains prior to their distribution to the employee.  An 
investor may terminate the Plan at any time. A form for use in establishing 
such a plan is available from MIMLIC Sales.

       A shareholder under a Systematic Withdrawal Plan may elect to receive 
payments monthly, quarterly, semiannually, or annually for a fixed amount of 
not less than $50 or a variable amount based on (1) the market value of a 
stated number of shares, (2) a specified percentage of the account's market 
value or (3) a specified number of years for liquidating the account (e.g., a 
20-year program of 240 monthly payments would be liquidated at a monthly rate 
of 1/240, 1/239, 1/238, etc.).  The initial payment under a variable payment 
option may be $50 or more.

       All shares under the Plan must be left on deposit.  Income dividends 
and capital gain distributions will be reinvested without a sales charge at 
net asset value determined on the record date.

       Since withdrawal payments represent proceeds from the liquidation of 
shares, withdrawals may reduce and possibly exhaust the initial investment, 
particularly in the event of a decline in net asset value.  In addition, 
withdrawal payments attributable to the redemption of Class B shares may be 
subject to a contingent deferred sales charge.  Accordingly, the shareholder 
should consider whether a Systematic Withdrawal Plan and the specified 
amounts to be withdrawn are appropriate in the circumstances.  The Funds and 
MIMLIC Sales make no recommendations or representations in this regard.  It 
may be appropriate for the shareholder to consult a tax adviser before 
establishing such a plan.

       Under this Plan, any distributions of income and realized capital 
gains must be reinvested in additional shares, and are reinvested at net 
asset value.  If a shareholder wishes to purchase additional shares of the 
respective Fund under this Plan, except in the case of Money Market Fund, 
other than by reinvestment of distributions, it should be understood that, in 
the case of


                                      -54-
<PAGE>

Class A shares, he or she would be paying a sales commission on such 
purchases, while liquidations effected under the Plan would be at net asset 
value, and, in the case of Class B shares, he or she would be purchasing such 
shares at net asset value while liquidations effected under the Plan would 
involve the payment of a contingent deferred sales charge. Purchases of 
additional shares concurrent with withdrawals are ordinarily disadvantageous 
to the shareholder because of sales charges and tax liabilities.  Additions 
to a shareholder account in which an election has been made to receive 
systematic withdrawals will be accepted only if each such addition is equal 
to at least one year's scheduled withdrawals or $1,200, whichever is greater. 
A shareholder may not have a "Systematic Withdrawal Plan" and a "Systematic 
Investment Plan" in effect simultaneously as it is not, as explained above, 
advantageous to do so.

EXCHANGE AND TELEPHONE TRANSFER PRIVILEGE

       The exchange and telephone transfer privileges available in connection 
with the Funds, the procedures for effecting such transactions and a 
description of the applicable charges, are described in each Fund's 
Prospectus in the text following the caption "Exchange and Telephone Transfer 
of Fund Shares."

       Telephone transfers and other exchanges may be made only between 
already open Fund accounts having identical registrations.

                                  REDEMPTIONS

       The procedures for redemption of Fund shares, and the charges 
applicable to redemptions of Class B shares, are summarized in the Prospectus 
in the text following the caption "Redemption of Fund Shares."


       Class B shares are subject to a contingent deferred sales charge of up 
to 5% if redeemed within six years of purchase.  See "Sales Charges-Class B 
Shares" and "Redemption of Fund Shares" in the Prospectus.


       The obligation of each of the Funds to redeem its shares when called 
upon to do so by the shareholder is mandatory with the following exceptions.

       Each Fund will pay in cash all redemption requests by any shareholder 
of record, limited in amount during any 90-day period to the lesser of 
$250,000 or 1% of the net asset value of the Fund at the beginning of such 
period.  When redemption requests exceed such amount, however, the Fund 
reserves the right to make part or all of the payment in the form of 
securities or other assets of the Fund.  An example of when this might be 
done is in case of emergency, such as in those situations enumerated in the 
following paragraph, or at any time a cash distribution would impair the 
liquidity of the Fund to the detriment of the existing shareholders.  Any 
securities being so distributed would be valued in the same manner as the 
portfolio of the Fund is valued.  If the recipient sold such securities, he 
or she probably would incur brokerage charges. The Fund has filed with the 
Securities and Exchange Commission a notification of election pursuant to 
Rule 18f-1 under the Investment Company Act of 1940 in order to make such 
redemptions in kind.


                                      -55-
<PAGE>

       Redemption of shares, or payment, may be suspended at times (a) when 
the New York Stock Exchange is closed for other than customary weekend or 
holiday closings, (b) when trading on said Exchange is restricted, (c) when 
an emergency exists, as a result of which disposal by the Fund of securities 
owned by it is not reasonably practicable, or it is not reasonably 
practicable for the Fund fairly to determine the value of its net assets, or 
during any other period when the Securities and Exchange Commission, by 
order, so permits; provided that applicable rules and regulations of the 
Securities and Exchange Commission shall govern as to whether the conditions 
prescribed in (b) or (c) exist.

REINSTATEMENT PRIVILEGE

       The Prospectus for each of the Advantus Load Funds describes redeeming 
shareholders' reinstatement privileges in the text following the caption 
"Reinstatement Privilege."  Written notice from persons wishing to exercise 
this reinstatement privilege must be received by MIMLIC Sales within 90 days 
after the date of the redemption.  The reinstatement or exchange will be made 
at net asset value next determined after receipt of the notice and will be 
limited to the amount of the redemption proceeds or to the nearest full share 
if fractional shares are not purchased.  All shares issued as a result of the 
reinstatement privilege applicable to redemptions of Class A and Class B 
shares will be issued only as Class A shares.  Any CDSC incurred in 
connection with the prior redemption (within 90 days) of Class B shares will 
not be refunded or re-credited to the shareholder's account.  Shareholders 
who redeem Class C shares and exercise their reinstatement privilege will be 
issued only Class C shares, which shares will have a remaining holding period 
prior to conversion equal to the remaining holding period applicable to the 
prior Class C shares at redemption.

       See "Taxes" in the Prospectus for a discussion of the effect of 
redeeming shares within 90 days after acquiring them and subsequently 
acquiring new shares in any mutual fund at a reduced sales charge.  Should an 
investor utilize the reinstatement privilege following a redemption which 
resulted in a loss, all or a portion of that loss might not be currently 
deductible for Federal income tax purposes, for an investor which is not 
tax-exempt.  Exercising the reinstatement privilege would not alter any 
capital gains taxes payable on a realized gain, for an investor which is not 
tax-exempt.  See discussion under "Taxes" in the Prospectus regarding the 
taxation of capital gains. 

                       DISTRIBUTIONS AND TAX STATUS

GENERALLY

       The tax status of the Funds and the distributions which they may make 
are summarized in the text of the Prospectus following the caption "Taxes."  
During the fiscal year ended September 30, 1996, each Fund fulfilled, and 
each Fund intends to continue to fulfill, the requirements of Subchapter M of 
the Internal Revenue Code of 1986, as amended (the "Code"), as a regulated 
investment company.  If so qualified, the Funds will not be liable for 
federal income taxes to the extent they distribute their taxable income to 
their shareholders.


                                      -56-
<PAGE>

INTERNATIONAL FUND

       Except for the transactions the Fund has identified as hedging 
transactions, the Fund is required for federal income tax purposes to 
recognize as income for each taxable year its net unrealized gains and losses 
on forward currency contracts as of the end of the year as well as those 
actually realized during the year. Except for transactions in forward 
currency contracts that are classified as part of a "mixed straddle," gain or 
loss recognized with respect to forward currency contracts is considered to 
be 60% long-term capital gain or loss and 40% short-term capital gain or 
loss, without regard to the holding period of the contract.  In the case of a 
transaction classified as a "mixed straddle," the recognition of losses may 
be deferred to a later taxable year.

       Sales of forward currency contracts that are intended to hedge against 
a change in the value of securities or currencies held by the Fund may affect 
the holding period of such securities or currencies and, consequently, the 
nature of the gain or loss on such securities or currencies upon disposition.

       It is expected that any net gain realized from the closing out of 
forward currency contracts will be considered gain from the sale of 
securities or currencies and therefore be qualifying income for purposes of 
the requirement under the Code that a regulated investment company derive at 
least 90% of its gross income from dividends interest, gains from the sale or 
disposition of securities, or otherwise from the business of investing in 
securities.  Moreover, in connection with the Code requirement that a 
regulated investment company must derive less than 30% of its gross income 
from gains on the sale or disposition of stock, securities, or (in certain 
cases) forward contracts or foreign currencies held less than three months, 
the Fund may be required to defer the closing out of forward currency 
contracts beyond the time when it would otherwise be advantageous to do so.  
It is expected that unrealized gains on forward currency contracts, which 
have been open for less than three months as of the end of the Fund's fiscal 
year and which are recognized for tax purposes, will not be considered gains 
on securities or currencies held less than three months for purposes of the 
30% test, as discussed above.

       Any realized gain or loss on closing out a forward currency contract 
such as a forward commitment for the purchase or sale of foreign currency 
will generally result in a recognized capital gain or loss for tax purposes.  
Under Code Section 1256, forward currency contracts held by the Fund at the 
end of each fiscal year will be required to be "marked to market" for federal 
income tax purposes, that is, deemed to have been sold at market value.  Code 
Section 988 may also apply to forward currency contracts.  Under Section 988, 
each foreign currency gain or loss is generally computed separately and 
treated as ordinary income or loss. In the case of overlap between Section 
1256 and 988, special provisions determine the character and timing of any 
income gain or loss.  The Fund will attempt to monitor Section 988 
transactions to avoid an adverse tax impact.

       Under the Code, the Fund's taxable income for each year will be 
computed without regard to any net foreign currency loss attributable to 
transactions after October 31, and any such net foreign currency loss will be 
treated as arising on the first day of the following taxable year.


                                  -57-
<PAGE>

ALL FUNDS

       Each Fund is subject to a non-deductible excise tax equal to 4 percent 
of the excess, if any, of the amount required to be distributed pursuant to 
the Code for each calendar year over the amount actually distributed.  In 
order to avoid the imposition of this excise tax, the Fund generally must 
declare dividends by the end of a calendar year representing 98 percent of 
the Fund's ordinary income for the calendar year and 98 percent of its 
capital gain net income (both long-term and short-term capital gains) for the 
twelve-month period ending October 31 of the calendar year.

       The foregoing relates only to federal taxation.  Prospective 
shareholders should consult their tax advisers as to the possible application 
of state and local income tax laws to Fund distributions.

                              FINANCIAL STATEMENTS

The Funds' financial statements for the year ended September 30, 1996, including
the financial highlights for each of the respective periods presented, appearing
in each of the Fund's Annual Report to shareholders, and the reports thereon of
the Funds' independent auditors, KPMG Peat Marwick LLP, also appearing therein,
are incorporated by reference in this Statement of Additional Information.  Each
Fund's 1996 Annual Report to Shareholders is enclosed with this Statement of
Additional Information.


                                       -58-
<PAGE>

                                     APPENDIX A

                           MORTGAGE-RELATED SECURITIES

       Mortgage-related securities represent an ownership interest in a pool 
of residential mortgage loans. These securities are designed to provide 
monthly payments of interest and principal to the investor.  The mortgagor's 
monthly payments to his lending institution are "passed-through" to investors 
such as the Fund. Most insurers or services provide guarantees of payments, 
regardless of whether or not the mortgagor actually makes the payment.  The 
guarantees made by issuers or servicers are backed by various forms of 
credit, insurance and collateral.

UNDERLYING MORTGAGES

       Pools consist of whole mortgage loans or participations in loans.  The 
majority of these loans are made to purchasers of 1-4 family homes.  Some of 
these loans are made to purchasers of mobile homes.  The terms and 
characteristics of the mortgage instruments are generally uniform within a 
pool buy may vary among pools.  For example, in addition to fixed-rate 
fixed-term mortgages, the fund may purchase pools of variable rate mortgages, 
growing equity mortgages, graduated payment mortgages and other types.

       All servicers apply standards for qualification to local lending 
institutions which originate mortgages for the pools.  Servicers also 
establish credit standards and underwriting criteria for individual mortgages 
included in the pools.  In addition, many mortgages included in pools are 
insured through private mortgage insurance companies.

LIQUIDITY AND MARKETABILITY

       Since the inception of the mortgage-related pass-through security in 
1970, the market for these securities has expanded considerably.  The size of 
the primary issuance market and active participation in the secondary market 
by securities dealers and many types of investors makes government and 
government-related pass-through pools highly liquid.  The recently introduced 
private conventional pools of mortgages (pooled by commercial banks, savings 
and loans institutions and others, with no relationship with government and 
government-related entities) have also achieved broad market acceptance and 
consequently an active secondary market has emerged.  However, the market for 
conventional pools is smaller and less liquid than the market for the 
government and government-related mortgage pools.  The Fund may purchase some 
mortgage-related securities through private placements, in which case only a 
limited secondary market exists, and the security is considered illiquid.

AVERAGE LIFE

       The average life of pass-through pools varies with the maturities of 
the underlying mortgage instruments.  In addition, a pool's term may be 
shortened by unscheduled or early payments of principal and interest on the 
underlying mortgages.  The occurrence of mortgage


                                     A-1
<PAGE>

prepayments is affected by factors including the level of interest rates, 
general economic conditions, the location and age of the mortgage and other 
social and demographic conditions.

       As prepayment rates of individual pools vary widely, it is not 
possible to accurately predict the average life of a particular pool.  For 
pools of fixed-rate 30-year mortgages, common industry practice is to assume 
that prepayments will result in a 12-year average life.  Pools of mortgages 
with other maturities or different characteristics will have varying 
assumptions for average life.  The assumed average life of pools of mortgages 
having terms of less than 30 years is less than 12 years, but typically not 
less than 5 years.

YIELD CALCULATIONS

       Yields on pass-through securities are typically quoted by investment 
dealers and vendors based on the maturity of the underlying instruments and 
the associated average life assumption.  In periods of falling interest rates 
the rate of prepayment tends to increase, thereby shortening the actual 
average life of a pool of mortgage-related securities.  Conversely, in 
periods of rising rates and the rate of prepayment tends to decrease, thereby 
lengthening the actual average life of the pool.  Historically, actual 
average life has been consistent with the 12-year assumption referred to 
above.

       Actual prepayment experience may cause the yield to differ from the 
assumed average life yield. Reinvestment of prepayments may occur at higher 
or lower interest rates than the original investment, thus affecting the 
yield of the Fund.  The compounding effect from reinvestments of monthly 
payments received by the Fund will increase the yield to shareholders 
compared to bonds that pay interest semi-annually.


                                   A-2
<PAGE>

                                APPENDIX B

                   BOND AND COMMERCIAL PAPER RATINGS

BOND RATINGS

    Moody's Investors Service, Inc. describes its five highest ratings for 
corporate bonds and mortgage-related securities as follows:

          Bonds which are rated Aaa are judged to be of the best quality. They 
    carry the smallest degree of investment risk and are generally 
    referred to as "gilt edge."  Interest payments are protected by a
    large or by an exceptionally stable margin and principal is secure.  While 
    the various protective elements are likely to change, such changes as 
    can be visualized are most unlikely to impair the fundamentally strong 
    position of such issues.

          Bonds which are rated Aa are judged to be of high quality by 
    all standards.  Together with the Aaa group they comprise what are 
    generally known as high grade bonds.  They are rated lower than the
    best bonds because margins of protection may not be as large as in Aaa 
    securities or fluctuation of protective elements may be of greater 
    amplitude or there may be other elements present which make the long 
    term risks appear somewhat larger than in Aaa securities.

          Bonds which are rated A possess many favorable investment 
    attributes and are to be considered as upper medium grade obligations. 
    Factors giving security to principal and interest are considered
    adequate but elements may be present which suggest a susceptibility to 
    impairment some time in the future.

          Bonds which are rated Baa are considered medium grade 
    obligations, i.e., they are neither highly protected nor poorly secured.
    Interest payments and principal security appear adequate for the
    present but certain protective elements may be lacking or may be 
    characteristically unreliable over any great length of time.  Such 
    bonds lack outstanding investment characteristics and in fact have
    speculative characteristics as well.

          Bonds which are rated Ba are judged to have speculative 
    elements; their future cannot be considered as well-assured.  Often 
    the protection of interest and principal payments may be very
    moderate, and thereby not well safeguarded during both good and bad times 
    over the future. Uncertainty of position characterizes bonds in this 
    class.

    Moody's Investors Service, Inc. also applies numerical modifiers, 1, 2, 
and 3, in each of these generic rating classifications.  The modifier 1 
indicates that the security ranks in the higher end of its generic rating 
category; the modifier 2 indicates a mid-range ranking; and the modifier 3 
indicates that the issue ranks in the lower end of its generic rating 
category.

     Standard & Poor's Corporation describes its five highest ratings for 
corporate bonds and mortgage-related securities as follows:


                                  B-1
<PAGE>


              AAA.  Debt rated "AAA" has the highest rating assigned by 
      Standard & Poor's.  Capacity to pay interest and repay principal is 
      extremely strong.

              AA.  Debt rated "AA" has a very strong capacity to pay interest 
      and repay principal and differs from the higher rated issues only in 
      small degree.

              A.  Debt rated "A" has a strong capacity to pay interest and 
      repay principal although it is somewhat more susceptible to the 
      adverse effects of changes in circumstances and economic conditions
      than debt in higher rated categories.

              BBB.  Debt rated "BBB" is regarded as having an adequate 
      capacity to pay interest and repay principal.  Whereas it normally 
      exhibits adequate protection parameters, adverse economic conditions
      or changing circumstances are more likely to lead to a weakened capacity
      to pay interest and repay principal for debt in this category than in 
      higher rated categories.

              BB.  Debt rated "BB" has less near-term vulnerability to 
      default than other speculative grade debt.  However, it faces major 
      ongoing uncertainties or exposure to adverse business, financial, or
      economic conditions that could lead to inadequate capacity to meet timely 
      interest and principal payments.

       Standard & Poor's Corporation applies indicators "+", no character, 
and "-" to the above rating categories.  The indicators show relative 
standing within the major rating categories.

COMMERCIAL PAPER RATINGS

       The rating Prime-1 is the highest commercial paper rating assigned by 
Moody's Investors Service, Inc. Among the factors considered by Moody's 
Investors Service, Inc. in assigning the ratings are the following: (1) 
evaluation of the management of the issuer, (2) economic evaluation of the 
issuer's industry or industries and an appraisal of speculative-type risks 
which may be inherent in certain areas; (3) evaluation of the issuer's 
products in relation to competition and customer acceptance; (4) liquidity; 
(5) amount and quality of long-term debt; (6) trend of earnings over a period 
of ten years; (7) financial strength of a parent company and the 
relationships which exist with the issuer; an (8) recognition by the 
management of obligations which may be present or may arise as a result of 
public interest questions and preparations to meet such obligations.

       The rating A-1 is the highest rating assigned by Standard & Poor's 
Corporation to commercial paper which is considered by Standard & Poor's 
Corporation to have the following characteristics:

              Liquidity ratios of the issuer are adequate to meet cash 
      redemptions.  Long-term senior debt is rated "A" or better.  The 
      issuer has access to at least two additional channels of borrowing.  Basic
      earnings and cash flow have an upward trend with allowance made for 
      unusual circumstances.  Typically, the issuer's industry is well 
      established and the


                                       B-2
<PAGE>

      issuer has a strong position within the industry. The reliability and 
      quality of management are unquestioned.


                                       B-3
<PAGE>
                                  APPENDIX C

                              FUTURES CONTRACTS


USE OF FUTURES CONTRACTS

       Prices of debt securities may be established in both the cash market 
and the futures market.  In the cash market, debt securities are purchased 
and sold with payment for the full purchase price being made in cash, 
generally within five business days after the trade.  In the futures market, 
a contract is made to purchase or sell a debt security in the future for a 
set price on a certain date.  Historically, prices established in the futures 
markets have tended to move generally and in the aggregate in concert with 
cash market prices and have maintained fairly predictable relationships.  The 
Fund may use interest rate futures solely as a defense, or hedge, against 
anticipated interest rate changes and not for speculation.  As described 
below, this would include the use of futures contract sales to protect 
against expected increases in interest rates and futures contract purchases 
to offset the impact of interest rate declines.

       The Fund currently could accomplish a similar result to that which it 
hopes to achieve through the use of futures contracts by selling debt 
securities with long maturities and investing in debt securities with short 
maturities when interest rates are expected to increase, or conversely, 
selling short-term debt securities and investing in long-term debt securities 
when interest rates are expected to decline.  However, because of the 
liquidity that is often available in the futures market, such protection is 
more likely to be achieved, perhaps at a lower cost and without changing the 
rate of interest being earned by the Fund, through using futures contracts.

DESCRIPTION OF FUTURES CONTRACTS

       A futures contract sale creates an obligation by the Fund, as seller, 
to deliver the specific type of financial instrument called for in the 
contract at a specified future time for a specified price.  A futures 
contract purchase creates an obligation by the Fund, as purchaser, to take 
delivery of the specific type of financial instrument at a specified future 
time at a specified price.  The specific securities delivered or taken, 
respectively, at settlement date, would not be determined until at or near 
that date.  The determination would be in accordance with the rules of the 
exchange on which the futures contract sale or purchase was made.

       Although futures contracts by their terms call for actual delivery or 
acceptance of securities, in most cases the contracts are closed out before 
the settlement date without the making or taking of delivery of securities.  
Closing out a futures contract sale is effected by the Fund entering into a 
futures contract purchase for the same aggregate amount of the specific type 
of financial instrument and the same delivery date.  If the price in the sale 
exceeds the price in the offsetting purchase, the Fund immediately is paid 
the difference and thus realizes a gain.  If the offsetting purchase price 
exceeds the sale price, the Fund pays the difference and realizes a loss.  
Similarly, the closing out of a futures contract purchase is effected by the 
Fund's entering into a futures contract sale.  If the offsetting sale price 
exceeds the purchase price, the Fund realizes a gain, and if the purchase 
price exceeds the offsetting sale price, the Fund realizes a loss.  See


                                     C-1
<PAGE>

"Risks of Futures Contracts", below, for a disclosure of the risks of being 
unable to close out a position before the settlement date.

       A public market now exists in futures contracts covering primarily the 
following financial instruments:  long-term United States Treasury Bonds; 
Government National Mortgage Association modified pass-through 
mortgage-backed securities (GNMA); three month United States Treasury Bills; 
United States Treasury Notes; and bank certificates of deposit.  It is 
expected that other financial instruments will be subject to futures 
contacts.  There is a $100,000 minimum for futures contracts in United States 
Treasury Bonds, GNMA pass-through securities, and United States Treasury 
Notes, and a $1,000,000 minimum for contracts in United States Treasury Bills 
and bank certificates of deposit.  The Fund may invest in interest rate 
futures contracts covering the financial instruments referred to above as 
well as in new types of such contracts that become available in the future.  
See "Example of Futures Contract Sale" and "Example of Futures Contract 
Purchase" below.

       Financial futures contracts are traded in an auction environment on 
the floors of several exchanges--principally, the Chicago Board of Trade, the 
Chicago Mercantile Exchange and the New York Futures Exchange. Each exchange 
guarantees performance under contract provisions through a clearing 
corporation, a nonprofit organization managed by the exchange membership.  
The Fund will pay a commission on each contract, including offsetting 
transactions.  In addition, the Fund is required to maintain margin deposits 
with brokerage firms through which it enters into futures contracts.  
Currently, the initial margin deposit per contract is $1,500 for Treasury 
Bills and commercial paper and $2,000 for Treasury Bonds and GNMAs.  The Fund 
will establish a custodial account with its bank custodian to hold initial 
margin deposits.  The account will be in the name of the futures commission 
merchant through which the Fund entered into the futures contract.  The 
futures commission merchant will be able to gain access to the assets held in 
this account only if he states that all conditions precedent to his right to 
direct disposition have been satisfied.  Margin balances will be adjusted 
daily to reflect unrealized gains and losses on open contracts.  The payments 
to or withdrawals from this account are known as variation margin payments.  
The Fund can withdraw amounts from this account in excess of the initial 
margin payments, and it is the Fund's intention to promptly make withdrawals 
of any such excess.  If the margin account is depleted below the maintenance 
level (a fixed percentage of the initial margin), the Fund will be required 
to deposit an amount that will bring the margin account back up to its 
initial margin level.  If the Fund has an unrealized gain above the amount of 
any net variation margin it has already received, the futures commission 
merchant, as of the close of that trading day, may receive, on behalf of the 
Fund, a variation margin payment from the clearing corporation in the amount 
of the gain.  By 10:30 A.M. the next day, the futures commission merchant 
must notify the Fund of its entitlement to receive a variation margin payment 
from the margin account, and the Fund will promptly demand payment of such 
amount.

       When purchasing interest rate futures contracts, the Fund will deposit 
and maintain in a separate account with its custodian cash or cash 
equivalents in an amount equal to the market value of such futures contracts, 
less any margin deposited on the Fund's long position.  These earmarked 
assets will be used to cover the Fund's obligation and will not be used to 
support any other transaction into which the Fund may enter.


                                     C-2
<PAGE>

RISKS IN FUTURES CONTRACTS

       One risk in employing futures contracts to protect against cash market 
price volatility is the prospect that futures prices will correlate 
imperfectly with the behavior of cash prices.  The ordinary spreads between 
prices in the cash and future markets, due to differences in the nature of 
those markets, are subject to distortions.  First, all participants in the 
futures market are subject to margin deposit and maintenance requirements.  
Rather than meeting additional margin deposit requirements, investors may 
close futures contracts through offsetting transactions which could distort 
the normal relationship between the cash and futures markets.  Second, the 
liquidity of the futures market depends on participants entering into 
offsetting transactions rather than making or taking delivery.  To the extent 
participants decide to make or take delivery, liquidity in the futures market 
could be reduced, thus producing distortion.  Third, from the point of view 
of speculators the deposit requirements in the futures market are less 
onerous than margin requirements in the securities market.  Therefore 
increased participation by speculators in the futures market may cause 
temporary price distortions.  Due to the possibility of distortion, a correct 
forecast of general interest trends by MIMLIC Management may still not result 
in a successful transaction.

       Another risk is that the Fund's investment adviser would be incorrect 
in its expectation as to the extent of various interest rate movements or the 
time span within which the movements take place.  Closing out a futures 
contract purchase at a loss because of higher interest rates will generally 
have one of two consequences depending on whether, at the time of closing 
out, the "yield curve" is normal (long-term rates exceeding short-term).  If 
the yield curve is normal, it is possible that the Fund will still be engaged 
in a program of buying long-term securities, because the price of long-term 
securities will likely have decreased. The closing out of the futures 
contract purchase at a loss will reduce the benefit of the reduced price of 
the securities purchased.  If the yield curve is inverted, it is possible 
that the Fund will retain its investments in short-term securities earmarked 
for purchase of longer term securities.  Thus, closing out of a loss will 
reduce the benefit of the incremental income that the Fund will experience by 
virtue of the high short-term rates.

       A third risk in using interest rates futures contracts is the 
possibility that the value of such futures contracts will not vary in direct 
proportion to the value of the Fund's portfolio securities.  Such deviations 
may result in the failure of the closing of futures transactions to 
completely offset decreases in the prices of debt securities in the Fund's 
portfolio or increases in the prices of debt securities which the Fund may 
wish to purchase.

       In addition, although the Fund will only purchase and sell futures 
contracts for which there is a public market, there can be no assurance that 
the Fund will be able to close out its position by entering into an 
offsetting transaction before the settlement date.  In that event, the Fund 
will be required to deliver or accept the underlying securities in accordance 
with the terms of its commitment.

EXAMPLE OF FUTURES CONTRACT SALE


                                     C-3
<PAGE>

       The Fund would engage in a futures contract sale to maintain the 
income advantage from continued holding of a long-term security while 
endeavoring to avoid part or all of the loss in market value that would 
otherwise accompany a decline in long-term securities prices.  Assume that 
the market value of a certain security in the Fund's portfolio tends to move 
in concert with the futures market prices of long-term United States Treasury 
bonds ("Treasury bonds").  The Fund wishes to fix the current market value of 
this portfolio security until some point in the future.  Assume the portfolio 
security has a market value of $100, and the Fund believes that, because of 
an anticipated rise in interest rates, the value will decline to $95.  The 
Fund might enter into futures contract sales of Treasury bonds for a price of 
$98.  If the market value of the portfolio security does indeed decline from 
$100 to $95, the futures market price for the Treasury bonds might also 
decline from $98 to $93.

       In that case, the $5 loss in the market value of the portfolio 
security would be offset by the $5 gain realized by closing out the futures 
contract sale.  Of course, the futures market price of Treasury bonds might 
decline to more than $93 or to less than $93 because of the imperfect 
correlation between cash and futures prices mentioned above.

       The Fund could be wrong in its forecast of interest rates and the 
futures market price could rise above $98.  In this case, the market value of 
the portfolio securities, including the portfolio security being protected, 
would increase.  The benefit of this increase would be reduced by the loss 
realized on closing out the futures contract sale.

       If interest rate levels did not change prior to settlement date, the 
Fund, in the above example, would incur a loss of $2 if it delivered the 
portfolio security on the settlement date (which loss might be reduced by an 
offsetting transaction prior to the settlement date).  In each transaction, 
nominal transaction expenses would also be incurred.

EXAMPLE OF FUTURES CONTRACT PURCHASE

       The Fund would engage in a futures contract purchase when it is not 
fully invested in long-term securities but wishes to defer for a time the 
purchase of long-term securities in light of the availability of advantageous 
interim investments, e.g., short-term securities whose yields are greater 
than those available on long-term securities.  The Fund's basic motivation 
would be to maintain for a time the income advantage from investing in the 
short-term securities; the Fund would be endeavoring at the same time to 
eliminate the effect of all or part of the increases in market price of the 
long-term securities that the Fund may purchase.

       For example, assume that the market price of a long-term security that 
the Fund may purchase, currently yielding 10%, tends to move in concert with 
futures market prices of Treasury bonds.  The Fund wishes to fix the current 
market price (and thus 10% yield) of the long-term security until the time 
(four months away in this example) when it may purchase the security.

       Assuming the long-term security has a market price of $100, and the 
Fund believes that, because of an anticipated fall in interest rates, the 
price will have risen to $105 (and the yield will have dropped to about 
9-1/2%) in four months, the Fund might enter into futures contracts


                                     C-4
<PAGE>

purchases of Treasury bonds for a price of $98.  At the same time, the Fund 
would assign a pool of investments in short-term securities that are either 
maturing in four months or earmarked for sale in four months, for purchase of 
the long-term security at an assumed market price of $100.  Assume these 
short-term securities are yielding 15%.  If the market price of the long-term 
bond does indeed rise from $100 to $105, the futures market price for 
Treasury bonds might also rise from $98 to $103.  In that case, the $5 
increase in the price that the Fund pays for the long-term security would be 
offset by the $5 gain realized by closing out the futures contract purchase.

       The Fund could be wrong in its forecast of interest rates; long-term 
interest rates might rise to above 10%, and the futures market price could 
fall below $98.  If short-term rates at the same time fall to 10% or below, 
it is possible that the Fund would continue with its purchase program for 
long-term securities. The market prices of available long-term securities 
would have decreased.  The benefit of this price decrease, and thus yield 
increase, will be reduced by the loss realized on closing out the futures 
contract purchase.

       If, however, short-term rates remained above available long-term 
rates, it is possible that the Fund would discontinue its purchase program 
for long-term securities.  The yields on short-term securities in the 
portfolio, including those originally in the pool assigned to the particular 
long-term security, would remain higher than yields on long-term bonds.  The 
benefit of this continued incremental income will be reduced by the loss 
realized on closing out the futures contract purchase.

       In each transaction, nominal transaction expenses would also be 
incurred.

TAX TREATMENT

       The amount of any gain or loss realized by the Fund on closing out a 
futures contract may result in a capital gain or loss for federal income tax 
purposes.  Generally, futures contracts held by the Fund at the close of the 
Fund's taxable year will be treated for federal income tax purposes as sold 
for their fair market value on the last business day of such year.  Forty 
percent of any gain or loss resulting from such constructive sale will be 
treated as short-term capital gain or loss and 60 percent of such gain or 
loss will be treated as long-term capital gain or loss.  The amount of any 
capital gain or loss actually realized by the Fund in a subsequent sale or 
other disposition of these futures contracts will be adjusted to reflect any 
capital gain or loss taken into account by the Fund in a prior year as a 
result of the constructive sale of the contract.  Notwithstanding the rules 
described above, with respect to futures contracts which are part of futures 
contract sales, and in certain other situations, the Fund may make an 
election which may have the effect of exempting all or a part of those 
identified future contracts from being treated for federal income tax 
purposes as sold on the last business day of the Fund's taxable year; all or 
part of any gain or loss otherwise realized by the Fund on any closing 
transaction may be deferred until all of the Fund's positions with respect to 
the futures contract sales are closed; and, all or part of any gain or loss 
may be treated as short-term capital gain or loss.

       Under the Federal income tax provisions applicable to regulated 
investment companies, at least 90% of the Fund's annual gross income must be 
derived from dividends, interest, payments with respect to loans of 
securities, and gains from the sale or other disposition of securities


                                     C-5
<PAGE>

("qualifying income").  Under the Internal Revenue Code of 1986, as amended 
(the "Code"), the Fund may include gains from forward contracts in 
determining qualifying income.  In addition, in order that the Fund continue 
to qualify as a regulated investment company for Federal income tax purposes, 
less than 30% of its gross income for any year must be derived from gains 
realized on the sale or other disposition of securities held by the Fund for 
less than three months.  For this purpose, the Fund will treat gains realized 
on the closing out of futures contracts as gains derived from the sale of 
securities.  This treatment could, under certain circumstances, require the 
Fund to defer the closing out of futures contracts until after three months 
from the date the  fund acquired the contracts, even if it would be more 
advantageous to close out the contracts prior to that time.  However, under 
the Code, a special rule is provided with respect to certain hedging 
transactions which has the effect of allowing the Fund to engage in such 
short-term transactions in limited circumstances.  Any gains realized by the 
Fund as a result of the constructive sales of futures contacts held by the 
Fund at the  end of its taxable year, as described in the preceding 
paragraph, will in all instances be treated as derived from the sale of 
securities held for three months or more, regardless of the actual period for 
which the Fund has held the futures contracts at the end of the year.


                                 C-6


<PAGE>




                           PART C.  OTHER INFORMATION



<PAGE>
   
OTHER INFORMATION
    
   
ITEM 24.  FINANCIAL STATEMENTS AND EXHIBITS
    
   
          (a)    Financial statements:  The Registrant's financial statements
for the year ended September 30, 1996, including the financial highlights for
each of the respective periods presented, appearing in the Registrant's Annual
Report to Shareholders, and the report thereon of the Registrant's independent
auditors, KPMG Peat Marwick LLP, also appearing therein, are incorporated by
reference in the Statement of Additional Information included in Part B of this
Registration Statement.  The following financial statements are included in such
Annual Report to Shareholders:
    
   
                 (1)       Investments in Securities as of September 30, 1996
    
   
                 (2)       Statement of Assets and Liabilities as of September
                           30, 1996
    
   
                 (3)       Statement of Operations for the year ended September
                           30, 1996
    
   
                 (4)       Statement of Changes in Net Assets for the years
                           ended September 30, 1996 and September 30, 1995
    
   
                 (5)       Notes to Financial Statements, including Financial
                           Highlights for the periods presented ended September
                           30, 1996
    
   
                 (6)       Independent Auditors' Report
    
   
          (b)    Exhibits:
    
   
                 (1)       Restated Articles of Incorporation for the Registrant
                           (1)
    
   
                 (2)       Revised Bylaws of the Registrant (1)
    
   
                 (4)(A)    Specimen common Class A share of the Registrant (1)
    
   
                 (4)(B)    Specimen common Class B share of the Registrant (1)
    
   
                 (4)(C)    Specimen common Class C share of the Registrant (1)
    
   
                 (5)       Investment Advisory Agreement between Advantus
                           Capital Management, Inc. and the Registrant (1)
    
   
                 (6)(A)    Underwriting and Distribution Agreement between the
                           Registrant and MIMLIC Sales Corporation (1)
    
   
                 (6)(B)    Dealer Sales Agreement between MIMLIC Sales
                           Corporation, principal underwriter for the
                           Registrant, and dealers (1)
    
   
                 (8)       Custodian Agreement between the Registrant and First
                           Trust National Association (1)
    
   
                                        1
    
<PAGE>
   
                 (9)       Administrative Service Agreement between the
                           Registrant and The Minnesota Mutual Life Insurance
                           Company
    
   
                 (10)      Opinion and Consent of Dorsey & Whitney LLP (1)
    
   
                 (11)      Consent of KPMG Peat Marwick LLP
    
   
                 (13)      Letter of Investment Intent regarding the
                           Registrant's initial capital (1)
    
   
                 (15)(A)   Plan of Distribution for Class A shares of the
                           Registrant (1)
    
   
                 (15)(B)   Plan of Distribution for Class B shares of the
                           Registrant (1)
    
   
                 (15)(C)   Plan of Distribution for Class C shares of the
                           Registrant (1)
    
   
                 (16)      Calculations of Yield and Total Returns of the
                           Registrant (1)
    
   
                 (17)(A)   Financial Data Schedule for Class A shares of the
                           Registrant
    
   
                 (17)(B)   Financial Data Schedule for Class B shares of the
                           Registrant
    
   
                 (17)(C)   Financial Data Schedule for Class C shares of the
                           Registrant
    
   
                 (19)      Power of Attorney to sign Registration Statement
                           executed by Directors of Registrant
    
   
                           ----------------------------
    
   
                 (1)       Incorporated by reference to the Registrant's
                           Registration Statement on Form N-1A filed January 26,
                           1996.
    
<PAGE>
   
ITEM 25.  PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
    
   
Wholly-owned subsidiaries of The Minnesota Mutual Life Insurance Company:
    
   
          MIMLIC Asset Management Company
          The Ministers Life Insurance Company
          MIMLIC Corporation
          Minnesota Fire and Casualty Company
          Northstar Life Insurance Company (New York)
          Robert Street Energy, Inc.
    
   
Open-end registered investment company offering shares solely to separate
accounts of The Minnesota Mutual Life Insurance Company:
    
   
          MIMLIC Series Fund, Inc.
    
   
Wholly-owned subsidiaries of MIMLIC Asset Management Company:
    
   
          MIMLIC Sales Corporation
          Advantus Capital Management, Inc.
    
   
Wholly-owned subsidiaries of Advantus Capital Management, Inc.:
    
   
          Advantus Venture Fund, Inc.
          Advantus Index 500 Fund, Inc.
    
   
Wholly-owned subsidiaries of MIMLIC Corporation:
    
   
          DataPlan Securities, Inc. (Ohio)
          MIMLIC Imperial Corporation
          MIMLIC Funding, Inc.
          MIMLIC Venture Corporation
          Personal Finance Company (Delaware)
          Wedgewood Valley Golf, Inc.
          Ministers Life Resources, Inc.
          Enterprise Holding Corporation
          HomePlus Agency, Inc.
    
   
Wholly-owned subsidiaries of Enterprise Holding Corporation:
    
   
          Oakleaf Service Corporation
          Lafayette Litho, Inc.
          Financial Ink Corporation
          Concepts in Marketing Research Corporation
          Concepts in Marketing Services Corporation
          National Association of Religious Professionals, Inc.
    
   
Wholly-owned subsidiary of Minnesota Fire and Casualty Company:
    
   
          HomePlus Insurance Company
    
   
Majority-owned subsidiaries of MIMLIC Imperial Corporation:
    
   
          J. H. Shoemaker Advisory Corporation
          Consolidated Capital Advisors, Inc.
    
   
Majority-owned subsidiary of MIMLIC Sales Corporation:
    
   
          MIMLIC Insurance Agency of Ohio, Inc.
    
   
Fifty percent-owned subsidiary of MIMLIC Imperial Corporation:
    
   
          C.R.I. Securities, Inc.
    
   
Majority-owned subsidiaries of The Minnesota Mutual Life Insurance Company:
    
   
          MIMLIC Life Insurance Company (Arizona)
          MIMLIC Cash Fund, Inc.
          Advantus Cornerstone Fund, Inc.
          Advantus Enterprise Fund, Inc.
          Advantus International Balanced Fund, Inc.
    
   
Less than majority owned, but greater than 25% owned, subsidiaries of The
Minnesota Mutual Life Insurance Company:
    
   
          Advantus Money Market Fund, Inc.
    
   
Less than 25% owned subsidiaries of The Minnesota Mutual Life Insurance Company:
    
   
          Advantus Bond Fund, Inc.
          Advantus Horizon Fund, Inc.
          Advantus Spectrum Fund, Inc.
          Advantus Mortgage Securities Fund, Inc.
    
   
          Unless indicated otherwise parenthetically, each of the above
corporations is a Minnesota corporation.
    
<PAGE>

ITEM 26.  NUMBER OF HOLDERS OF SECURITIES

   
        As of November 30, 1996, a date within 90 days of the date of filing of
this Registration Statement:
    

             Title of Class       Number of Record Holders
             --------------       ------------------------
   
          Class A Common Shares            5,989
          Class B Common Shares              924
          Class C Common Shares              177
    

ITEM 27.  INDEMNIFICATION

        The Articles of Incorporation and Bylaws of the Registrant provide
that the Registrant shall indemnify such persons, for such expenses and
liabilities, in such manner, under such circumstances, to the full extent
permitted by Section 302A.521, Minnesota Statutes, as now enacted or hereafter
amended, provided that no such indemnification may be made if it would be in
violation of Section 17(h) of the Investment Company Act of 1940, as now enacted
or hereafter 

<PAGE>

amended.  Section 302A.521 of the Minnesota Statutes, as now enacted, provides 
that a corporation shall indemnify a person made or threatened to be made a 
party to a proceeding against judgments, penalties, fines, settlements and 
reasonable expenses, including attorneys' fees and disbursements, incurred by 
the person in connection with the proceeding, if, with respect to the acts or 
omissions of the person complained of in the proceeding, the person has not been
indemnified by another organization for the same judgments, penalties, fines, 
settlements and reasonable expenses incurred by the person in connection with 
the proceeding with respect to the same acts or omissions; acted in good faith;
received no improper personal benefit and the Minnesota Statute dealing with 
directors' conflicts of interest, if applicable, has been satisfied; in the case
of a criminal proceeding, had no reasonable cause to believe the conduct was 
unlawful and reasonably believed that the conduct was in the best interests of 
the corporation or, in certain circumstances, reasonably believed that the 
conduct was not opposed to the best interests of the corporation.

         Section 17(h) of the Investment Company Act of 1940 provides that 
neither the charter, certificate of incorporation, articles of association, 
indenture of trust, nor the by-laws of any registered investment company, nor 
any other instrument pursuant to which such a company is organized or 
administered, shall contain any provisions which protects or purports to 
protect any director or officer of such company against any liability to the 
company or to its security holders to which he would otherwise be subject by 
reason of willful misfeasance, bad faith, gross negligence or reckless 
disregard of duties involved in the conduct of his office.  The staff of the 
Securities and Exchange Commission has stated that it is of the view that an 
indemnification provision does not violate Section 17(h) if it precludes 
indemnification for any liability arising by reason of willful misfeasance, 
bad faith, gross negligence, or reckless disregard of duties ("Disabling 
conduct") and sets forth reasonable and fair means for determining whether 
indemnification shall be made.  In the staff's view, "reasonable and fair 
means" would include (1) a final decision on the merits by a court or other 
body before whom the proceeding was brought that the person to be indemnified 
("indemnitee") was not liable by reason of disabling conduct or, (2) in the 
absence of such a decision, a reasonable determination, based upon a review 
of the facts, that the indemnitee was not liable by reason of disabling 
conduct, by (a) the vote of a majority of a quorum of directors who are 
neither "interested persons" of the company as defined in Section 2(a)(19) of 
the Investment Company Act of 1940 nor parties to the proceeding 
("disinterested, non-party

<PAGE>

directors") or (b) an independent legal counsel in a written opinion.  The
dismissal of either a court action or administrative proceeding against an
indemnitee for insufficiency of evidence of any disabling conduct with which he
has been charged would, in the staff's view, provide reasonable assurance that
he was not liable by reason of disabling conduct.  The staff also believes that
a determination by the vote of a majority of a quorum of disinterested, non-
party directors would provide reasonable assurance that the indemnitee was not
liable by reason of disabling conduct.

         Insofar as indemnification for liability arising under the 
Securities Act of 1933 may be permitted to directors, officers and 
controlling persons of the Registrant pursuant to the foregoing provisions, 
or otherwise, the Registrant has been advised that in the opinion of the 
Securities and Exchange Commission such indemnification is against public 
policy as expressed in the Act and is, therefore, unenforceable.  In the 
event that a claim for indemnification against such liabilities (other than 
the payment by the Registrant of expenses incurred or paid by a director, 
officer or controlling person of the Registrant in the successful defense of 
any action, suit or proceeding) is asserted by such director, officer or 
controlling person in connection with the securities being registered, the 
Registrant will, unless in the opinion of its counsel the matter has been 
settled by controlling precedent, submit to a court of appropriate 
jurisdiction the question whether such indemnification by it is against 
public policy as expressed in the Act and will be governed by the final 
adjudication of such issue.

ITEM 28.  BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Directors and Officers       Office with
of Investment Adviser     Investment Adviser      Other
- ---------------------     ------------------      -----
Business Connections
- --------------------

Paul H. Gooding             President and         President, Treasurer and
                            Director              Director, MIMLIC
                                                  Asset Management Company;
                                                  President, Secretary and
                                                  Director, MIMLIC Corporation;

<PAGE>

                                                  Director, MIMLIC Imperial
                                                  Corporation; 
                                                  Director, MIMLIC Venture
                                                  Corporation; Vice President 
                                                  and Director, MIMLIC
                                                  Funding, Inc.; Vice President
                                                  and Director, 
                                                  Robert Street Energy, Inc.; 
                                                  Vice President, Director, 
                                                  Personal Finance Company;
                                                  Vice President and Treasurer,
                                                  The Minnesota Mutual
                                                  Life Insurance Company

James P. Tatera         Senior Vice President,    Vice President
                        and Chief Treasurer       and Director 
                                                  Equity Portfolio Manager,
                                                  MIMLIC Asset Management
                                                  Company; Vice President, 
                                                  MIMLIC Funding, Inc.;
                                                  Second Vice President, 
                                                  The Minnesota Mutual
                                                  Life Insurance Company

Thomas A. Gunderson     Vice President            None

Kent R. Weber           Vice President            None

Wayne R. Schmidt        Vice President            Secretary and Treasurer,
                                                  MIMLIC Funding, Inc.; 
                                                  Treasurer

<PAGE>

                                                  and Assistant Secretary, 
                                                  Robert Street Energy, Inc.; 
                                                  Vice President and Secretary, 
                                                  MIMLIC Imperial Corporation

Matthew D. Finn         Vice President            President, Unified Capital
                                                  Management, Inc.

Jeffrey R. Erickson     Vice President            None

Kevin J. Hiniker        Secretary                 Senior Attorney, MIMLIC
                                                  Asset
                                                  Management Company

<PAGE>
   
ITEM 29.  PRINCIPAL UNDERWRITERS
    
   
(a)  MIMLIC Sales currently acts as a principal underwriter for the following
investment companies:
    
   
          Advantus Horizon Fund, Inc.
          Advantus Spectrum Fund, Inc.
          Advantus Mortgage Securities Fund, Inc.
          Advantus Money Market Fund, Inc.
          Advantus Bond Fund, Inc.
          Advantus Cornerstone Fund, Inc.
          Advantus Enterprise Fund, Inc.
          Advantus International Balanced Fund, Inc.
          Advantus Venture Fund, Inc.
          Advantus Index 500 Fund, Inc.
          MIMLIC Cash Fund, Inc.
          Minnesota Mutual Variable Fund D
          Minnesota Mutual Variable Annuity Account
          Minnesota Mutual Variable Life Account
          Minnesota Mutual Group Variable Annuity Account
          Minnesota Mutual Variable Universal Life Account
    
   
          (b)  The name and principal business address, positions and offices
with MIMLIC Sales, and positions and offices with Registrant of each director
and officer of MIMLIC Sales is as follows:
    
   
                              Positions and                 Positions and
Name and Principal            Offices                       Offices
Business Address              with Underwriter              with Registrant
- ------------------            ----------------              ---------------
    
   
Robert E. Hunstad             Chairman of the Board         None
The Minnesota Mutual          and Director
  Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
    
   
George I. Connolly            President, Chief              None
MIMLIC Sales Corporation      Executive Officer and
400 Robert Street North       Director
St. Paul, Minnesota 55101
    
   
Margaret Milosevich           Vice President, Chief         None
MIMLIC Sales Corporation      Operations Officer and
400 Robert Street North       Treasurer
St. Paul, Minnesota 55101
    
   
Dennis E. Prohofsky           Director and Secretary        None
The Minnesota Mutual
  Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
    
   
Thomas L. Clark               Assistant Secretary and       None
MIMLIC Sales Corporation      Assistant Treasurer
400 Robert Street North
St. Paul, Minnesota 55101
    
   
Margaret A. Berg              Assistant Secretary           None
The Minnesota Mutual
  Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
    
   
          (c)  Not applicable.
    

ITEM 30.  LOCATION OF ACCOUNTS AND RECORDS

          The physical possession of the accounts, books and other documents
required to be maintained by Section 3(a) of the Investment Company Act of 1940
and Rules 31a-1 to 31a-3 promulgated thereunder is maintained by Minnesota
Mutual, 400 Robert Street North, St. Paul, Minnesota 55101; except that the
physical possession of certain accounts, books and

<PAGE>

other documents related to the custody of the Registrant's securities is
maintained by the following custodian:

          First Trust National Association
          180 East Fifth Street
          St. Paul, Minnesota  55101

ITEM 31.  MANAGEMENT SERVICES

          Not applicable.

ITEM 32.  UNDERTAKINGS

          (a)  Not applicable.

          (b)  Not applicable.

          (c)  The Registrant hereby undertakes to furnish, upon request and
without charge to each person to whom a prospectus is delivered, a copy of the
Registrant's latest annual report to shareholders containing the information
called for by Item 5A.

<PAGE>

                                                  SIGNATURES

   
         Pursuant to the requirements of the Securities Act of 1933 and the 
Investment Company Act of 1940 the Registrant certifies that it meets all of 
the requirements for effectiveness of this Registration Statement pursuant to 
Rule 485(b) under the Securities Act of 1933 and has duly caused this 
Post-Effective Amendment to its Registration Statement to be signed on its 
behalf by the undersigned, thereto duly authorized, in the City of St. Paul 
and the State of Minnesota on the 29th day of January, 1997.
    

                                               ADVANTUS SPECTRUM FUND, INC.
                                                        Registrant


                                             By   /s/  Paul H. Gooding
                                                ------------------------------
                                                Paul H. Gooding,
                                                President


        Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.

   
 /s/  Paul H. Gooding           President (principal
- -----------------------------   executive officer)
  Paul H. Gooding               and Director             January 29, 1997
    
   
 /s/  Frederick P. Feuerherm    Director and Treasurer
- -----------------------------   (principal financial
  Frederick P. Feuerherm        and accounting officer)  January 29, 1997
    

  Ralph D. Ebbott*   Director)
- -----------------------------
  Ralph D. Ebbott            )          By  /s/  Paul H. Gooding
                             )             --------------------------
                             )             Paul H.Gooding
                                           Attorney-in-Fact

   
  Charles E. Arner*  Director)
- ------------------------------
  Charles E. Arner           )          Dated: January 29, 1997
    

<PAGE>

                              )
                              )
  Ellen S. Berscheid* Director)
- ------------------------------
  Ellen S. Berscheid          )

   
- ------------------
*Registrant's director executing power of attorney dated July 31, 1996, a  copy
of which is filed herewith.
    

<PAGE>




                          ADVANTUS SPECTRUM FUND, INC.

                                    EXHIBITS




<PAGE>

   
                                  EXHIBIT INDEX
    

   
Exhibit Number and Description:
    
   
               (1)       Restated Articles of Incorporation for the
                         Registrant (1)
    
   
               (2)       Revised Bylaws of the Registrant (1)
    
   
               (4)(A)    Specimen common Class A share of the Registrant (1)
    
   
               (4)(B)    Specimen common Class B share of the Registrant (1)
    
   
               (4)(C)    Specimen common Class C share of the Registrant (1)
    
   
               (5)       Investment Advisory Agreement between Advantus Capital
                         Management, Inc. and the Registrant (1)
    
   
               (6)(A)    Underwriting and Distribution Agreement between the
                         Registrant and MIMLIC Sales Corporation (1)
    
   
               (6)(B)    Dealer Sales Agreement between MIMLIC Sales
                         Corporation, principal underwriter for the Registrant,
                         and dealers (1)
    
   
               (8)       Custodian Agreement between the Registrant and First
                         Trust National Association (1)
    
   
               (9)       Administrative Service Agreement between the Registrant
                         and The Minnesota Mutual Life Insurance Company
    
   
               (10)      Opinion and Consent of Dorsey & Whitney LLP (1)
    
   
               (11)      Consent of KPMG Peat Marwick LLP
    
   
               (13)      Letter of Investment Intent regarding the Registrant's
                         initial capital (1)
    
   
               (15)(A)   Plan of Distribution for Class A shares of the
                         Registrant (1)
    
   
               (15)(B)   Plan of Distribution for Class B shares of the
                         Registrant (1)
    
   
               (15)(C)   Plan of Distribution for Class C shares of the
                         Registrant (1)
    
   
               (16)      Calculations of Yield and Total Returns of the
                         Registrant (1)
    
   
               (17)(A)   Financial Data Schedule for Class A shares of the
                         Registrant
    
   
               (17)(B)   Financial Data Schedule for Class B shares of the
                         Registrant
    
   
               (17)(C)   Financial Data Schedule for Class C shares of the
                         Registrant
    
   
               (19)      Power of Attorney to sign Registration Statement
                         executed by Directors of Registrant
    
   
                         -------------------------
    
   
               (1)  Incorporated by reference to the Registrant's Registration
                    Statement on Form N-1A filed January 26, 1996.
    

<PAGE>

                        ADMINISTRATIVE SERVICE AGREEMENT


            AGREEMENT made as of the 23rd of October, 1990, by and between
MIMLIC Asset Allocation Fund, Inc., a Minnesota corporation, having its
principal office and place of business at 400 Robert Street North, St. Paul,
Minnesota, 55101, (the "Fund"), and The Minnesota Mutual Life Insurance Company,
a Minnesota corporation having its principal office and place of business at 400
Robert Street North, St. Paul, Minnesota, 55101, ("Minnesota Mutual").

            WHEREAS, the Fund desires to engage Minnesota Mutual to provide to
the Fund accounting, audit, legal and other administrative services, and
Minnesota Mutual desires to provide such services;

            NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:


Article 1   TERMS OF APPOINTMENT; DUTIES OF MINNESOTA MUTUAL

            1.01    Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints Minnesota Mutual, and Minnesota
Mutual hereby agrees to provide certain accounting, auditing, legal and other
administrative services to the Fund.

            1.02    Minnesota Mutual agrees that it will perform such services
as are required by the Fund, including, without limitation, the following:

             (a)    register or qualify, and maintain the registrations or
qualifications, of the Fund and its Shares under state or other securities laws.

             (b)    calculate the Fund's net asset value per Share at such times
and in such manner as specified in the Fund's current prospectus and statement
of additional information and at such other times as the parties hereto may from
time to time agree upon;

             (c)    upon the Fund's distribution of dividends and capital gains,
calculate the amount of such dividends and capital gains to be received per
Share and calculate the number of additional Shares to be received by each
Shareholder, other than any shareholder who has elected to receive such
dividends and capital gains in cash;

             (d)    prepare and maintain all accounting records required by the
Fund, including a general ledger;

             (e)    prepare the Fund's annual and semi-annual financial
statements;

<PAGE>


             (f)    prepare and file the Fund's income, excise and other tax
returns;

             (g)    provide audit assistance in conjunction with the Fund's
independent auditors;

             (h)    provide such legal services as the parties hereto may from
time to time agree upon, including without limitation preparation and filing
with the Securities and Exchange Commission of the annual or more frequent post-
effective amendments to the Fund's registration statement and the Fund's proxy
materials; and

             (i)    provide such other administrative services as the parties
hereto may from time to time agree upon.

            Procedures applicable to certain of these services may be
established from time to time by agreement between the Fund and Minnesota
Mutual.


Article 2   COMPENSATION FOR SERVICES

            2.01    In payment for the administrative services to be performed
by Minnesota Mutual hereunder, the Fund shall pay to Minnesota Mutual a fee in
accordance with Schedule A hereto.

            2.02    In addition to the fee paid under Section 2.01 above, the
Fund will reimburse Minnesota Mutual for out-of-pocket expenses or advances
incurred by Minnesota Mutual in connection with Minnesota Mutual's performance
of services hereunder.


Article 3   REPRESENTATIONS AND WARRANTIES OF MINNESOTA MUTUAL

            Minnesota Mutual represents and warrants to the Fund that:

            3.01    It is a corporation duly organized and existing and in good
standing under the laws of the State of Minnesota.

            3.02    It is duly qualified to carry on its business in the State
of Minnesota.

            3.03    It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.


Article 4   REPRESENTATIONS AND WARRANTIES OF THE FUND

            The Fund represents and warrants to Minnesota Mutual that:

                                       -2-
<PAGE>

            4.01    It is a corporation duly organized and existing and in good
standing under the laws of Minnesota.

            4.02    It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform this Agreement.

            4.03    All corporate proceedings required by said Articles of
Incorporation and Bylaws have been taken to authorize it to enter into and
perform this Agreement.

            4.04    It is an open-end and diversified management investment
company registered under the Investment Company Act of 1940.

            4.05    A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect to all
Shares of the Fund being offered for sale.


Article 5   INDEMNIFICATION

            5.01    Minnesota Mutual shall not be responsible for, and the Fund
shall indemnify and hold Minnesota Mutual harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to:

             (a)    All actions of Minnesota Mutual or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith without negligence or willful misconduct.

             (b)    The Fund's refusal or failure to comply with the terms of
this Agreement, or which arise out of the Fund's lack of good faith, negligence
or willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.

             (c)    The reliance on or use by Minnesota Mutual or its agents or
subcontractors of information, records and documents which (i) are received by
Minnesota Mutual or its agents or subcontractors and furnished to it by or on
behalf of the Fund, and (ii) have been prepared and/or maintained by the Fund or
any other person or firm on behalf of the Fund.

             (d)    The reliance on, or the carrying out by Minnesota Mutual or
its agents or subcontractors of any instructions or requests of the Fund.

            5.02    Minnesota Mutual shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action or
failure or omission to act by Minnesota Mutual as a result of Minnesota Mutual's
lack of good faith, negligence or willful misconduct.

            5.03    At any time Minnesota Mutual may apply to any officer of the
Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection

                                       -3-
<PAGE>

with the services to be performed by Minnesota Mutual under this Agreement, and
Minnesota Mutual and its agents or subcontractors shall not be liable and shall
be indemnified by the Fund for any action taken or omitted by it in reliance
upon such instructions or in good faith reliance upon the opinion of such
counsel.  Minnesota Mutual, its agents and subcontractors shall be protected and
indemnified in acting upon any paper or document furnished by or on behalf of
the Fund, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data, records or
documents provided Minnesota Mutual or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means authorized by the
Fund, and shall not be held to have notice of any change of authority of any
person, until receipt of written notice thereof from the Fund.  Minnesota
Mutual, its agents and subcontractors shall also be protected and indemnified in
recognizing stock certificates which are reasonably believed to bear the proper
manual or facsimile signatures of the officers of the Fund, and the proper
countersignature of any current or former transfer agent or registrar, or of a
co-transfer agent or co-registrar.

            5.04    In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to perform or
otherwise from such causes.

            5.05    Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.

            5.06    In order that the indemnification provisions contained in
this Article 5 shall apply, upon the assertion of a claim for which either party
may be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim.  The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim.  The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.


Article 6   COVENANTS OF THE FUND AND MINNESOTA MUTUAL

            6.01    Minnesota Mutual shall keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable.  To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, Minnesota Mutual agrees that all such records
prepared or maintained by Minnesota Mutual relating to the services to be
performed by Minnesota Mutual hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in accordance with
its request.

                                       -4-
<PAGE>

            6.02    Minnesota Mutual and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanges or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.

            6.03    In the case of any requests or demands for the inspection of
the Shareholder records of the Fund, Minnesota Mutual will endeavor to notify
the Fund and to secure instructions from an authorized officer of the Fund as to
such inspection.  Minnesota Mutual reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.


Article 7   EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT

            7.01    The effective date of this Agreement shall be March 1, 1991.
Unless sooner terminated as hereinafter provided, this Agreement shall continue
in effect until the next annual meeting of the Fund's shareholders and from year
to year thereafter, but only so long as such continuance is specifically
approved at least annually by the Board of Directors of the Fund, including the
specific approval of a majority of the directors who are not interested persons
of the Fund, MIMLIC Asset Management Company ("MIMLIC Asset"), investment
adviser to the Fund, or MIMLIC Sales Corporation ("MIMLIC Sales"), the
underwriter of the Fund's Shares, cast in person at a meeting called for the
purpose of voting on such approval.

            7.02    This Agreement may be terminated at any time without the
payment of any penalty by the vote of the Board of Directors of the Fund, or by
Minnesota Mutual, upon 60 days' written notice to the other party.


Article 8   ASSIGNMENT

            8.01    This Agreement shall automatically terminate in the event of
its assignment as such term is defined by the Investment Company Act of 1940, as
amended.


Article 9   AMENDMENT

            9.01    This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Directors of the Fund, including a majority of the directors who
are not interested persons of the Fund, MIMLIC Asset or MIMLIC Sales, cast in
person at a meeting called for the purpose of voting on such approval.

                                       -5-
<PAGE>

Article 10  MINNESOTA LAW TO APPLY

            10.01   This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Minnesota.


Article 11  MERGER OF AGREEMENT

            11.01   This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.


Article 12          NOTICES

            12.01   Any notice under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for receipt of such notice.


            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.


                                        MIMLIC ASSET ALLOCATION FUND, INC.



                                        By
                                          --------------------------------------

                                        Attest
                                              ----------------------------------


                                        THE MINNESOTA MUTUAL LIFE
                                        INSURANCE COMPANY



                                        By
                                          --------------------------------------

                                        Attest
                                              ----------------------------------

                                       -6-
<PAGE>

                          ADVANTUS SPECTRUM FUND, INC.
                                   SCHEDULE A
                        (As amended January 15, 1996 and
                           effective February 1, 1996)


            Minnesota Mutual shall receive, as compensation for its services
pursuant to this Agreement, a monthly fee determined in accordance with the
following table:

                             Monthly Administrative
                                  SERVICES FEE
                             ----------------------
                                     $3,600

            Said monthly fees shall be paid to Minnesota Mutual not later than
five days following the end of each calendar quarter in which said services were
rendered.



                                       -7-

<PAGE>


(KPMG Peat Marwick LLP Letterhead)



                    INDEPENDENT AUDITORS' CONSENT


The Board of Directors
Advantus Spectrum Fund, Inc.


We consent to the use of our report included herein and the references to our 
Firm under the headings "FINANCIAL HIGHLIGHTS" and "COUNSEL AND INDEPENDENT 
AUDITORS" in Part A and "FINANCIAL STATEMENTS" in Part B of the Registration 
Statement.

                                                /s/ KPMG Peat Marwick LLP

                                                KPMG Peat Marwick LLP


Minneapolis, Minnesota
January 29, 1997

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
N-SAR AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM N-SAR.
</LEGEND>
<RESTATED> 
<CIK> 0000756925
<NAME> MULTI CLASS ADVANTUS SPECTRUM FUND
<SERIES>
   <NUMBER> 100
   <NAME> CLASS A
<MULTIPLIER> 1000
<CURRENCY> US
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          SEP-30-1996
<PERIOD-START>                             OCT-01-1995
<PERIOD-END>                               SEP-30-1996
<EXCHANGE-RATE>                                      1
<INVESTMENTS-AT-COST>                            60436
<INVESTMENTS-AT-VALUE>                           67515
<RECEIVABLES>                                      634
<ASSETS-OTHER>                                      50
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                   68199
<PAYABLE-FOR-SECURITIES>                            53
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           88
<TOTAL-LIABILITIES>                                141
<SENIOR-EQUITY>                                     44
<PAID-IN-CAPITAL-COMMON>                         56080
<SHARES-COMMON-STOCK>                             3789
<SHARES-COMMON-PRIOR>                             3760
<ACCUMULATED-NII-CURRENT>                           32
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                           4823
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                          7079
<NET-ASSETS>                                     58848
<DIVIDEND-INCOME>                                  354
<INTEREST-INCOME>                                 1840
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     820
<NET-INVESTMENT-INCOME>                           1375
<REALIZED-GAINS-CURRENT>                          5195
<APPREC-INCREASE-CURRENT>                         1371
<NET-CHANGE-FROM-OPS>                             7941
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                         1243
<DISTRIBUTIONS-OF-GAINS>                          3098
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                            614
<NUMBER-OF-SHARES-REDEEMED>                        868
<SHARES-REINVESTED>                                284
<NET-CHANGE-IN-ASSETS>                            9104
<ACCUMULATED-NII-PRIOR>                             13
<ACCUMULATED-GAINS-PRIOR>                         2979
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              371
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    820
<AVERAGE-NET-ASSETS>                             55736
<PER-SHARE-NAV-BEGIN>                            14.79
<PER-SHARE-NII>                                    .34
<PER-SHARE-GAIN-APPREC>                           1.59
<PER-SHARE-DIVIDEND>                               .34
<PER-SHARE-DISTRIBUTIONS>                          .85
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              15.53
<EXPENSE-RATIO>                                   1.26
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        


</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
N-SAR AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM N-SAR.
</LEGEND>
<RESTATED> 
<CIK> 0000756925
<NAME> MULTI CLASS ADVANTUS SPECTRUM FUND
<SERIES>
   <NUMBER> 101
   <NAME> CLASS B
<MULTIPLIER> 1000
<CURRENCY> US
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          SEP-30-1996
<PERIOD-START>                             OCT-01-1995
<PERIOD-END>                               SEP-30-1996
<EXCHANGE-RATE>                                      2
<INVESTMENTS-AT-COST>                            60436
<INVESTMENTS-AT-VALUE>                           67515
<RECEIVABLES>                                      634
<ASSETS-OTHER>                                      50
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                   68199
<PAYABLE-FOR-SECURITIES>                            53
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           88
<TOTAL-LIABILITIES>                                141
<SENIOR-EQUITY>                                     44
<PAID-IN-CAPITAL-COMMON>                         56080
<SHARES-COMMON-STOCK>                              508
<SHARES-COMMON-PRIOR>                              212
<ACCUMULATED-NII-CURRENT>                           32
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                           4823
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                          7079
<NET-ASSETS>                                      7860
<DIVIDEND-INCOME>                                  354
<INTEREST-INCOME>                                 1840
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     820
<NET-INVESTMENT-INCOME>                           1375
<REALIZED-GAINS-CURRENT>                          5195
<APPREC-INCREASE-CURRENT>                         1371
<NET-CHANGE-FROM-OPS>                             7941
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                           99
<DISTRIBUTIONS-OF-GAINS>                           231
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                            329
<NUMBER-OF-SHARES-REDEEMED>                         56
<SHARES-REINVESTED>                                 22
<NET-CHANGE-IN-ASSETS>                            9104
<ACCUMULATED-NII-PRIOR>                             13
<ACCUMULATED-GAINS-PRIOR>                         2979
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              371
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    820
<AVERAGE-NET-ASSETS>                              5407
<PER-SHARE-NAV-BEGIN>                            14.74
<PER-SHARE-NII>                                    .27
<PER-SHARE-GAIN-APPREC>                           1.56
<PER-SHARE-DIVIDEND>                               .25
<PER-SHARE-DISTRIBUTIONS>                          .85
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              15.47
<EXPENSE-RATIO>                                    1.9
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        


</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
N-SAR AND IS QUALIFIED IN ITS ENTIRETY REFERENCE TO SUCH FORM N-SAR.
</LEGEND>
<RESTATED> 
<CIK> 0000756925
<NAME> MULTI CLASS ADVANTUS SPECTRUM FUND
<SERIES>
   <NUMBER> 102
   <NAME> CLASS C
<MULTIPLIER> 1000
<CURRENCY> US
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          SEP-30-1996
<PERIOD-START>                             OCT-01-1995
<PERIOD-END>                               SEP-30-1996
<EXCHANGE-RATE>                                      1
<INVESTMENTS-AT-COST>                            60436
<INVESTMENTS-AT-VALUE>                           67515
<RECEIVABLES>                                      634
<ASSETS-OTHER>                                      50
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                   68199
<PAYABLE-FOR-SECURITIES>                            53
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           88
<TOTAL-LIABILITIES>                                141
<SENIOR-EQUITY>                                     44
<PAID-IN-CAPITAL-COMMON>                         56080
<SHARES-COMMON-STOCK>                               88
<SHARES-COMMON-PRIOR>                               13
<ACCUMULATED-NII-CURRENT>                           32
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                           4823
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                          7079
<NET-ASSETS>                                      1351
<DIVIDEND-INCOME>                                  354
<INTEREST-INCOME>                                 1840
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     820
<NET-INVESTMENT-INCOME>                           1375
<REALIZED-GAINS-CURRENT>                          5195
<APPREC-INCREASE-CURRENT>                         1371
<NET-CHANGE-FROM-OPS>                             7941
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                           13
<DISTRIBUTIONS-OF-GAINS>                            21
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                             78
<NUMBER-OF-SHARES-REDEEMED>                          6
<SHARES-REINVESTED>                                  2
<NET-CHANGE-IN-ASSETS>                            9104
<ACCUMULATED-NII-PRIOR>                             13
<ACCUMULATED-GAINS-PRIOR>                         2979
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              371
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    820
<AVERAGE-NET-ASSETS>                               638
<PER-SHARE-NAV-BEGIN>                            14.74
<PER-SHARE-NII>                                    .28
<PER-SHARE-GAIN-APPREC>                           1.52
<PER-SHARE-DIVIDEND>                               .26
<PER-SHARE-DISTRIBUTIONS>                          .85
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              15.43
<EXPENSE-RATIO>                                    1.9
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        


</TABLE>

<PAGE>

                              ADVANTUS MUTUAL FUNDS
                              AND MIMLIC CASH FUND
                                POWER OF ATTORNEY
                         TO SIGN REGISTRATION STATEMENT



     The undersigned, Directors of Advantus Horizon Fund, Inc., Advantus
Spectrum Fund, Inc., Advantus Mortgage Securities Fund, Inc., Advantus Money
Market Fund, Inc., Advantus Bond Fund, Inc., Advantus Cornerstone Fund, Inc.,
Advantus Enterprise Fund, Inc., Advantus International Balanced Fund, Inc.,
Advantus Venture Fund, Inc., Advantus Index 500 Fund, Inc., and MIMLIC Cash
Fund, Inc. (the "Funds"), appoint Paul H. Gooding, Eric J. Bentley and Michael
J. Radmer, and each of them individually, as attorney-in-fact for the purpose of
signing in their names and on their behalf as Directors of the Funds and filing
with the Securities and Exchange Commission Registration Statements on Form N-
1A, or any amendments thereto, for the purpose of registering shares of Common
Stock of the Funds for sale by the Funds and to register the Funds under the
Investment Company Act of 1940.



Dated:  July 31, 1996           /s/ Charles E. Arner
                                ------------------------------------------------
                                                Charles E. Arner


                                /s/ Ellen S. Berscheid
                                ------------------------------------------------
                                                Ellen S. Berscheid


                                /s/ Ralph D. Ebbott
                                ------------------------------------------------
                                               Ralph D. Ebbott


                                /s/ Frederick P. Feuerherm
                                ------------------------------------------------
                                             Frederick P. Feuerherm


                                /s/ Paul H. Gooding
                                ------------------------------------------------
                                               Paul H. Gooding


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